Seeking Alpha

Telefonica offers concessions to get E-Plus deal approved

  • A Telefonica (TEF -0.6%) spokesman tells Reuters his company has offered concessions to EU regulators in an attempt to win approval for its €8.1B ($11.9B) acquisition of rival German carrier E-Plus (KKPNY).
  • Regulators have been nervous about diminished competition, given the deal will lower the number of German mobile network owners to three: Telefonica, Vodafone, and Deutsche Telekom. MVNOs argue Telefonica should be required to sell some prepaid brands and provide network access to them at cost.
  • But as recent remarks from the French government show, there's a growing willingness among continental regulators to support a measure of consolidation, with the hope that merging weaker players will create entities more able/willing to make big network investments.
  • The EU plans to rule on Telefonica/E-Plus by June 23. Telefonica still hopes to close the deal by the end of Q2.
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