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Brussels “for the clock” and asks for more time to analyze the Orange-Másmóvil merger

Date: September 29, 2023 Time: 17:16:19

The European Commission has decided to ‘stop the clock’ in the review process of the merger of Orange and Másmóvil in Spain. The organism postponed ‘sine die’ the authorization, waiting to study the effects of the transactions in the residential market. it will have to analyze whether corrective measures are really necessary to compensate for the reduction in competition in that segment. Neither of the two companies have wanted to make public whether they will propose voluntary ‘remedies’ to try to appease the regulator’s doubts.

The body has made the decision public this Friday. Although no new deadline has been set. This is what is known as ‘clock stop’, governed by article 11 of the European regulation. Therefore, it could last until the last quarter of the year. Orange itself expressed confidence in being able to count on the ‘green light’ in September in order to be able to carry out all the procedures and finalize the transaction at the end of the year.

This is a highly relevant operation for which the European Commission has already opted for a more in-depth investigation in a second phase. Last June, he raised what is known in slang as a ‘chart statement’, where he explained his doubts about how the merger of both companies could affect competition, which would generate the largest group by customers in Spain above of Telefonica. In this study, he eliminated concerns regarding the wholesale market -rental of fixed and mobile networks to other operators- but kept those linked to the retailer.

In that document, he warned that there could be “less competitive pressure” by eliminating an “innovative rival” in that retail market, which could lead to “big price increases.” “The anticipated anti-competitive effects are substantial, even taking into account the possible cost savings, in a context in which competition has been a driver of investment and quality of services in the market,” the regulator explained.

The CEO of Orange Spain Ludovic Pech Usually, the European body gives the parties the opportunity to present proposals ranging from the sale of assets to the opening of networks to preferential conditions for third parties to achieve that ‘green light’. This is, for example, what happened in the United Kingdom with Cellnex and the purchase of Hutchison’s assets.

A relevant operation

“We continue to trust the price result and we are going to continue working to convey to the Commission the benefits of the operation for consumers and companies,” said the fourth operator in June, which it has defended in recent months, like Orange and other rivals such as Vodafone and Telefónica, which approved without ‘remedies’.

The union of both with a 50% ‘joint venture’, which was negotiated exclusively from March to July of last year, 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 their own figures, a total of 24.8 million would be mobile lines, while 7.1 million are fixed broadband contracts. Global revenues would exceed the barrier of 7,300 million euros, with an operating result (Ebitda) of more than 2,200 million.

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

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