European Union merger regulators hit the pause button on their review of Orange SA’s €19 billion ($20.9 billion) Spanish joint venture with Masmovil Ibercom SA while the pair hone a package of remedies to allay competition concerns.
(Bloomberg) — European Union merger regulators hit the pause button on their review of Orange SA’s €19 billion ($20.9 billion) Spanish joint venture with Masmovil Ibercom SA while the pair hone a package of remedies to allay competition concerns.
The European Commission, the EU’s deals watchdog, said on Friday that it stopped the clock running on its investigation to seek additional information from Orange and Masmovil.
The commission is seeking more details on viable concessions — such as a selloff of some Orange assets in Spain — that could solve their concerns, according to people familiar with the matter who spoke on condition of anonymity. Regulators also want details of would-be buyers.
The commission didn’t give further details of the delay, while Orange and Masmovil didn’t immediately respond to a request for comment.
One option is for Orange to divest parts of its fixed network and spectrum assets, said the people, who added that Avatel Telecom is the likeliest candidate to take over the assets.
There could be competition from other players in the country such as Romanian discount operator Digi, Adamo Telecom, and Finetwork for access to Orange’s assets as part of the sale.
The EU opened an in-depth probe in April, warning that the joint venture could reduce the number of network operators in Spain and that the pair would have the incentive to restrict access of virtual operators to wholesale mobile network and wholesale fixed network access services.
This was followed by a formal EU statement of objections, which said the deal could “lead to significant price increases” in Spain.
–With assistance from Rodrigo Orihuela.
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