German telecoms watchdog the Federal Network Agency (FNA, also known as BNetzA) has said it will examine the planned acquisition of KPN Telecom’s local mobile unit E-Plus by Telefonica Deutschland, Reuters reports. The FNA will look into the impact on network frequencies to see if the deal would distort competition in the market, while the Federal Cartel Office (FCO) has separately said that the transaction will need to be registered with authorities in Brussels. As reported by CommsUpdate, KPN announced yesterday that it had agreed to sell E-Plus to Telefonica Deutschland for EUR5 billion (USD6.6 billion) in cash and a 17.6% stake in the combined entity post transaction. The merger of Germany’s third and fourth largest mobile network operators by subscribers will create a stronger competitor to larger players Telekom Deutschland and Vodafone Germany. Telefonica said the deal will result in an operator with 43 million fixed and mobile customers and combined revenues of EUR8.3 billion (end of 2012). Under the terms of the transaction, KPN will transfer 100% of its interest in E-Plus to Telefonica Deutschland for a consideration of EUR3.7 billion in cash and newly issued shares in Telefonica Deutschland, representing 24.9% of the share capital. Simultaneously, Spanish parent Telefonica will acquire a 7.3% interest in Telefonica Deutschland from KPN for a cash consideration of EUR1.3 billion, lifting its total stake to 65.0%, while the remaining 17.4% will be in free float.