The European Commission (EC) has rejected a renewed request from Germany’s competition authority, the Federal Cartel Office (Bundeskartellamt), for the right to examine the proposed merger of Telefonica Germany (O2) and E-Plus. In December the EC stated that it would need to carry out an in-depth investigation of the EUR8.6 billion (USD11.6 billion) deal, rejecting an initial request from Germany to review the acquisition itself. Arguing that that the case requires an extensive examination of whether the merger between the two mobile network operators would lead to competition problems, last month the Bundeskartellamt issued a second request to refer the deal for assessment under German competition law. However, in a statement last week the EC concluded that it was better placed to deal with the case because of its experience in assessing mergers in the mobile telecoms sector and the need for a consistent application of the merger control rules in the European Union. The EC will now continue its in-depth investigation into the proposed transaction and has until 14 May 2014 to make a final decision on the matter.
As previously reported by CommsUpdate, shareholders of E-Plus’ Dutch parent KPN approved the sale of its German mobile unit to Telefonica at an extraordinary general meeting in October, and at the end of the month the Spanish company submitted a proposal to the EC seeking approval for the deal. Following completion of the transaction, which was announced in July, KPN will receive EUR5.0 billion in cash and a 20.5% stake in the enlarged mobile operator.