Mergers: Commission approves acquisition of ONO by Vodafone
3 Jul 2014 10:49 AM
The European Commission has cleared the proposed
acquisition of Grupo Corporativo ONO ("ONO") by Vodafone Group Plc
under the EU Merger Regulation. Both companies provide fixed and mobile
telecommunications services in Spain. The Commission concluded that the
transaction would not raise competition concerns, as the parties'
activities are largely complementary: ONO's main activity is related to
fixed telecoms, whereas Vodafone is mainly active in mobile
telecoms.
Vodafone and ONO's activities overlap in a
number of markets in the fixed and mobile telecommunications markets in Spain.
However, the Commission found that the impact of the transaction on these
markets is likely to be limited as the combined entity would continue to face
significant competition from other market players, such as the incumbent
operator Telefónica, and other operators such as Orange and
Jazztel.
The transaction also gives rise to a number of
vertical and conglomerate relationships in the fixed and mobile
telecommunication markets in Spain, in particular in relation to the provision
of bundled multiple play services. However, the Commission's investigation
indicated that the merged entity will not be able to shut out fixed or mobile
operators from the markets for multiple play services, because of the
availability of alternative operators and the regulatory obligations in
relation to wholesale access on mobile and fixed services.
The Commission therefore concluded that the
transaction would not significantly impede effective competition in
Spain.
The transaction was notified to the Commission on
23 May 2014.
Background
Both Vodafone and ONO provide fixed and mobile
telecommunications services in Spain. However, the parties' activities are
largely complementary as ONO mainly is active in relation to fixed telecoms,
whereas Vodafone is mainly active in mobile telecoms. ONO, but not Vodafone, is
also active in the provision of pay TV services.
Merger control rules
and procedures
The Commission has the duty to assess mergers and
acquisitions involving companies with a turnover above certain thresholds (see
Article 1 of the Merger Regulation) and to prevent concentrations that would
significantly impede effective competition in the EEA or any substantial part
of it.
The vast majority of mergers do not pose
competition problems and are cleared after a routine review. From the moment a
transaction is notified, the Commission generally has a total of 25 working
days to decide whether to grant approval (Phase I) or to start an in-depth
investigation (Phase II).
More information is
available in the public case register on the Commission’s competition
website under case number M.7231.