2023-07-28 14:35:16
The European Commission has “stopped the clock” in its investigation into the merger between Orange and MásMóvil in Spain because the companies have not provided certain “important information” requested by Brussels on time, so the final decision will be taken beyond September 4, the initial date set to approve or not the operation.
This procedure in merger investigations is activated if the parties “do not provide important information on time that the European Commission has requested,” according to the community spokesperson for Competition, Arianna Podesta. Therefore, once this information is provided, “the clock is started again and the deadline for the Commission’s decision is adjusted accordingly,” she added.
Likewise, sources familiar with the situation have also indicated to Ep that the Brussels decision seeks to “have more time to assess the impact of the operation on competition.”
Brussels announced last April the opening of an in-depth investigation into the merger to determine whether the operation, which will create a new customer leader in Spain, could put competition in the offer of multiple service packages and retail service at risk mobile and fixed broadband.
In this sense, at the end of June, Brussels withdrew its considerations on the impact that this operation could have on the wholesale market, that is, with regard to an operator offering its networks to others. However, he said he fears that the merger of two such close competitors could reduce the number of operators, which would end up triggering higher prices for end consumers as well as lower service quality.
The operation was notified to the Community Executive on February 13 and, after the investigation opened in April and the statement of objections notified at the end of June, the final deadline for making a decision was set, in principle, for September 4.
However, after Brussels’ decision to “stop the clock” that period has been extended, although a new date has not been set to make the final decision on this operation, valued at around 18.6 billion euros.
In fact, the CEO of MásMóvil, Meinrad Spenger, slipped this Friday during the conference with analysts in the framework of the presentation of the results of the second quarter that his forecast is that Brussels will make its decision in the fourth quarter of the year.
avoid conditions
In this context, one of the main objectives of Orange and MásMóvil in the negotiations held so far with Brussels is to avoid the imposition of ‘remedies’, that is, that companies have to dispose of certain assets to comply with the rules of competence.
In this sense, there are several companies in the sector that are pending the resolution to try to acquire some of these possible ‘remedies’.
The CEO of Orange Spain, Ludovic Pech, assured at the end of June that one of the company’s objectives in its talks with the European Commission is to dispel the doubts that Brussels maintains about the impact of the operation on the retail market and try to avoid the imposition of conditions.
In this sense, Orange announced last week the appointment of Jean-François Fallacher as non-executive president of the company in Spain in the midst of the merger process with MásMóvil. Fallacher, who was CEO of Orange Spain between September 2020 and April 2023, thus returns to the company in Spain to deal with the merger process, which was announced when he was the “first sword” of the company in the country.
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