Telefonica Deutschland said it has received final clearance for its acquisition of German rival operator E-Plus after the European Commission confirmed that the previously announced agreement with virtual player Drillisch complies with the agreed upfront conditions.
It therefore appears that the Commission has completed its investigation into whether Telefonica Deutschland's plan to sell network capacity to Drillisch meets the requirements for its conditional approval of Telefonica's acquisition of E-Plus from KPN.
It had been previously reported that the EU wanted to re-examine the merger to allay concerns that Telefonica's deal with Drillisch would not ensure a sufficient level of competition. Commission spokesman Antoine Colombani noted that analysing Telefonica's agreement with Drillisch was standard procedure, and did not mean that the Commission was re-examining the case.
Telefónica Deutschland said it remains confident of closing the acquisition during the third quarter of 2014 and will execute the capital measures to finance the transaction as the next step.
The merger, which includes a cash payment of €5 billion, was approved in July after Telefonica committed to a number of remedies aimed at safeguarding competition in the German mobile market. One of them will see Telefonica sell 20% of the combined entity's network capacity to Drillisch, which will have the option to acquire an additional 10% at a later date.
“With the final clearance of the European Commission now granted, we are able to close the transaction soon, and create a leading digital telecommunication company in Germany,” said Markus Haas, CSO of Telefonica Deutschland.