EC approves Vodafone-ONO merger; closure this month

3 Jul 2014

The European Commission (EC) yesterday (2 July 2014) approved Vodafone Group’s proposed acquisition of Spanish cableco Grupo Corporativo ONO under the European Union (EU) Merger Regulations, after being notified of the deal on 23 May 2014. In a press release, the Commission concluded that the transaction would not raise competition concerns, as both parties’ fixed and mobile telecommunications services in Spain are ‘largely complementary’: ONO’s main activity is related to fixed telecoms, whereas Vodafone Spain is mainly active in the mobile segment. Although Vodafone and ONO’s activities do overlap to some extent in the fixed and mobile markets, the EC found that the impact of the transaction on these markets is likely to be limited as the combined entity would continue to face significant competition from other market players, such as incumbent Telefonica and other operators such as Orange and Jazztel. The EC continued: ‘The transaction also gives rise to a number of vertical and conglomerate relationships in the fixed and mobile telecommunication markets in Spain, in particular in relation to the provision of bundled multiple play services. However, the Commission’s investigation indicated that the merged entity will not be able to shut out fixed or mobile operators from the markets for multiple play services, because of the availability of alternative operators and the regulatory obligations in relation to wholesale access on mobile and fixed services.’ Vodafone said that the EUR7.2 billion (USD9.9 billion) takeover of ONO, which was agreed in March, will now be closed within two to three weeks, while joint Vodafone/ONO product offers are scheduled to be launched in September, utilising shared assets including ONO’s cable broadband network covering around 7.15 million households.

Spain, Grupo Corporativo ONO, Vodafone Group, Vodafone Spain