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Brussels finalizes its ‘objection sheet’ on the great merger of Orange and Másmóvil

Date: February 26, 2024 Time: 20:10:42

First pronouncement on the great merger of Orange and Másmóvil by the European Commission in sight. The Brussels Competition department finalizes what is known as a ‘chart statement’, which contains all the objections and doubts that the body has about the transactions and their impact on the market. The document will contain those suspicions and possible corrective measures. This is a step prior to the final decision, whose deadline is set at the beginning of next September.

The document, which is also known in slang as a ‘statement of objections’, is in its final phase and will be sent to the parties in the near future, according to the Bloomberg news agency and specialized regulatory media. It will not advance any position of the Commission but, predictably, it will raise some of the concerns of the regulators about the impact of the operation -as it already did when the ‘phase 2’ of study of the transactions began-.

This ‘bill’ is one more phase of any merger authorization operation in the EU. This is a formal step in which the Commission informs the companies concerned in writing of the objections raised against them. Sending a statement does not prejudge the outcome of the investigation. A few months ago it had already warned that there was a risk that the transaction “could reduce competition in the retail offer of fixed and mobile broadband services, as well as packages in Spain.”

In this document, not only the concerns will be affected, but also possible corrective measures. Both parties -and also other competitors such as Telefónica itself- have defended over and over again in public that due to the strong competition in the market in Spain these ‘remedies’ would not be needed. But there are other voices in the market that point out that they could end up in initiatives such as the sale of network assets or the obligation to give competitors wholesale access to the merger infrastructure under more or less preferential conditions.

The Commission has, at least for now, until September 4 to make a final decision. Already last April it announced an extension of the six-month period planned for this ‘phase 2’ study. There may be several pauses in the period until officials receive the documentation required by companies and the market.

mass concentration

The union of both with a 50% ‘joint venture’, which was negotiated exclusively from March to July, will generate a group with a valuation of 18,600 million euros, of which 7,800 million correspond to the Spanish division of the French group and 10,900 million to that of the operator directed by Meinrad Spenger. Together they will add more than 31 million customers. Of these, according to its own figures, a total of 24.8 million would be mobile lines, while 7.1 million are fixed broadband contracts. This would make it the leading operator, even above Telefónica. Global revenues would exceed the barrier of 7,300 million euros, with an operating result (Ebitda) of more than 2,200 million.

The agreement, which implies an additional debt package of 6,600 million euros to pay 5,850 million of a ‘megadividend’ to both companies (with greater weight to Orange for contributing its assets without liabilities), contemplates the potential listing on the stock market third year, with a position of control by the French. Due to the fact that there are still uncertainties about the result of the Commission’s study, Orange believes that it cannot include the Spanish subsidiary on its balance sheet as “discontinued operations”.

* This website provides news content gathered from various internet sources. It is crucial to understand that we are not responsible for the accuracy, completeness, or reliability of the information presented Read More

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.
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