The European Commission is not happy with the planned takeover of Germany's E-Plus by Telefonica, it emerged this week.
Antitrust regulators object to the deal in its current form and will likely send formal notices to that effect to the parties involved, Reuters reported late on Tuesday, citing people familiar with the matter.
Telefonica agreed to acquire E-Plus from Netherlands-based KPN in July with a view to merging it with its own German mobile unit. The terms of the takeover were later revised; KPN will receive €5 billion in cash and a 20.5% stake in the combined company, should the deal go ahead.
Earlier this month KPN CEO Eelco Blok said he is confident of gaining regulatory support for the deal, but given that it will reduce the number of mobile network operators in Germany to three from four, it is hardly surprising that the EU might step in.
As with previous deals with a similar result – Hutchison's acquisition of Orange in Austria being a prime example – the EU will likely ask for certain conditions to reduce any impact on competition in the market.
In Austria Hutchison agreed to divest spectrum, base stations and a mobile service provider unit, as well as offering favourable terms for MVNOs to access its network, in order to gain EU approval.