EU gives green light to Orange, MasMovil merger
The EU on Tuesday approved the merger between French telecoms giant Orange and Spanish rival MasMovil that will create the biggest mobile operator in Spain, provided they fulfill a package of commitments.
The two companies announced in July 2022 a 18.6-billion-euro ($20.1 billion) deal but the European Commission, the bloc’s powerful antitrust authority, last year expressed concerns the takeover could restrict competition in the Spanish market. In an initial probe, the commission found that the transaction would have created the largest operator by customer numbers in Spain and eliminated a competitor for Orange since MasMovil had attracted a “significant number” of customers from the giant.
EU regulators feared this would mean price rises for Spanish consumers, “well above 10 percent”, the commission said. Brussels hopes that two commitments, also known as remedies, will alleviate those fears. “The approval is conditional upon full compliance with a commitments package offered by Orange and MasMovil,” the commission said in a statement. Firstly, the companies agreed to sell spectrum to Romania’s Digi, a mobile network operator in Spain, which the commission said would allow Digi “to build its own mobile network”.
Such a move would enable Digi to “exert a strong competitive constraint on the joint venture”, the commission added. Secondly, Digi will also be to use their network to complement its own, it said, as part of an optional national roaming agreement. The EU’s competition commissioner, Margrethe Vestager, said the commitments “will ensure that consumers in Spain continue to benefit from a competitive telecom market, in terms of prices, quality and 5G connectivity”.
Orange and MasMovil welcomed the “favorable” decision. “Today’s announcement is a crucial moment for the future development of the Group in Europe. Our proposed Joint Venture with MasMovil will create a single, stronger, and more sustainable player in Spain,” Orange CEO Christel Heydemann said in a statement. The companies plan to finalize the deal by the end of March. — AFP