The European Commission (EC) is expected to open an in-depth investigation into Telefonica’s proposed acquisition of KPN’s German unit E-Plus next week, according to a report by Reuters which cites people familiar with the matter. The EC will also reject an application lodged last month by Germany’s Federal Cartel Office (Bundeskartellamt) for the right to examine the EUR8.6 billion (USD11.6 billion) deal, which would see the number of network operators in the mobile market reduced from four to three. The EU competition regulator originally set a deadline of 6 December for its preliminary review of the deal, but this was extended to 20 December to consider the Bundeskartellamt’s request to take over the case. The opening of an in-depth investigation automatically means that the German bid will be rejected, the report adds, although a lengthy probe could allow the companies to counter regulatory concerns with specific concessions.
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.