European Commission Opens In-Depth Probe of Vodafone, Liberty Global Deal

By Michael Dabaie 
 

The European Commission said Tuesday it has opened an in-depth investigation to assess Vodafone Group PLC's (VOD) proposed acquisition of Liberty Global PLC's (LBTYA) businesses in the Czech Republic, Germany, Hungary and Romania.

The commission said it is concerned the takeover may reduce competition in Germany and the Czech Republic.

Liberty Global said in May it would sell its businesses in Germany, Hungary, Romania and the Czech Republic to Vodafone, a merger that would create one of the continent's biggest telecommunications carriers.

The EC said in the Czech Republic, providers of standalone telecommunications services could be shut out from retail markets for mobile telecommunications services, Internet access services and TV services because of the converged products the merged entity could offer.

The commission said that, in Germany, Vodafone and Unitymedia, Liberty's local subsidiary, currently compete against each other in areas served by Unitymedia via cable on the retail fixed telecommunications markets and on the retail TV markets. The commission said it has concerns the transaction would eliminate competition between the merging companies, reduce the number of players and limit the merged entity's incentives to compete effectively with the remaining operators. The EC also said the proposed transaction could eliminate competition between the merging companies for investment in next generation networks.

"This is a pan-European transaction, looking to create a converged national challenger in four European markets. We are confident that the transaction will be approved, as it will deliver increased consumer choice, more competition and further investment in high speed networks. We continue to expect final approval by mid-2019 in line with our original announcement," Vodafone said in a statement Tuesday.

"We always anticipated a second phase review given the size and scope of the transaction, and it is clear that the EU is retaining regulatory authority over the case," Liberty Global's Chief Executive Mike Fries said in a statement.

The EC said at this stage it hasn't identified any specific competition concerns for the Hungarian and Romanian markets.

The commission said it now has 90 working days, until May 2, to make a decision.

European Commission statement: http://europa.eu/rapid/press-release_IP-18-6772_en.htm

Write to Michael Dabaie at [e-mail]

(END) Dow Jones Newswires

December 11, 2018 15:19 ET (20:19 GMT)

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