European Union (EU) antitrust regulators are reportedly planning to examine the proposed acquisition of alternative Spanish broadband operator Jazz Telecom (Jazztel) by France’s Orange Group. According to Reuters, which cites two unnamed sources familiar with the matter, while both companies involved are understood to have offered concessions with a view to gaining approval for the deal on 13 November 2014, these were not deemed sufficient by the competition watchdog. As such, one of the sources has calimed that the European Commission (EC) is likely to officially announce the opening of an in-depth investigation in to the matter this week, while it is also believed it will reject a request from the Comision Nacional de la Competencia (CNC), Spain’s competition authority, to examine the case itself. The deadline for the EC’s preliminary review of the deal is 4 December (today), and should it decide to extend its examination, it will have at least a further 90 working days (extendable to 105) to consider the matter.
As previously reported by CommsUpdate, in September 2014, and just a few days after it had been confirmed that Jazztel had begun initial talks with Sweden’s TeliaSonera over a possible offer for the latter’s local mobile unit Yoigo, Orange Group made an offer to buy 100% of Jazztel’s shares at a price of EUR13 (USD16.8) per share in cash, a figure it estimated represented a 34% premium over the operator’s average closing price in the last 30 days. With the deal effectively valuing Jazztel at EUR3.4 billion, it was noted that Orange Group requires at least 50.01% of shareholders to accept its offer, though at the time of the announcement it had already secured an agreement to sell from the Spanish telco’s main shareholder, Leopoldo Fernandez Pujals, who holds 14.5% of the stock. Commenting on the proposed purchase, Orange Group CEO Stephane Richard was cited as saying: ‘We are doing this deal to accelerate our growth in Spain, particularly in fixed-mobile convergent offers … The new company will be the incontestable number two in fixed services and third in mobile behind Vodafone, but we think we’ll be able to take second-place pretty quickly.’