The merger that the Spanish division of Orange and MasMóvil plan to carry out faces an unexpected setback in the European Union according to Bloomberg: the operation, which has a value of about 19,000 million dollars, can only be carried out if both companies make changes as requested by EU regulators responsible for ensuring competition
This is how the European Commission will communicate it to both, through a resolution cataloging the reasons it has to oppose for the moment the merger between the two operators, which are currently the second and fourth largest in Spain. This communication, which is quite common in operations of this type, also offers companies possible solutions so that they can solve the problems identified by the regulators.
In operations related to telecommunications operators, as in this case, the solutions can range from the sale of certain assets to the implementation of solutions to ensure that the new network resulting from the operation is interoperable with that of rivals.
The body in charge of monitoring purchase and merger operations in Europe opened an investigation into this particular operation last April. Already then it warned that the joint venture that will come out of its merger could reduce the number of network operators in Spain, and that the two will have sufficient incentives to restrict the access of virtual operators to the general mobile network, as well as to services access to the fixed network.
For now there is no firm warning for the merger of Orange and MasMovil, since The European Commission has a deadline of September 4 to make a decision, although this period that you have for it could be extended. Of course, although the result of their investigation is a list of objections, which indicates that the EU has serious concerns about the transaction, most company mergers avoid a veto by solving the problems detected in terms of competition.
In addition, companies that want to carry out purchases and mergers have the right to appeal, both in an oral hearing and in writing, the resolutions of this type of investigation, but most decide to solve the barriers that are raised, with the aim of avoiding a complete veto on the operation.
