EU Delays Decision on German Mobile Networks Merger Plans
Published on: 20th May 2014
By: Ian Mansfield
European anti trust regulators have again extended the deadline to rule on the proposed merger of two of Germany's mobile networks.
The deal between Telefonica Germany and KPN's E-Plus will now be decided on the 3rd July, much later than originally planned.
The EU said the delay was for procedural reasons. It is not thought to be due to issues with the merger itself.
The German government had been trying to pressue the EU to let it decide on the matter as an internal affair, but the European Commission insisted on taking the merger into its own review process first, citing concerns about a reduction in competition in the market.
The merger between Telefonica O2's majority owned German subsidiary and KPN's E-Plus network would see the local market reduce to three mobile networks.
Telefonica Germany is understood to be in talks with a number of MVNOs that it would offer preferential access in order to smooth the regulatory concerns.
Under the terms of the rmerger, KPN is selling its stake in E-Plus to Telefonica Deutschland for EUR5 billion, and a 20.5% stake in the merged company.
The total implied transaction valuation for E-Plus is EUR 8.55 billion.