EC rejects Spanish bid to review Orange's €3.4B Jazztel offer

The European Commission (EC) will not refer the planned acquisition of Spain-based broadband provider Jazztel by Orange to the Spanish competition authority for assessment under Spanish competition law, saying it believes it is better placed to deal with the case.

Spain's competition authority submitted a referral request for the proposed deal in November after Orange informed the EC of its planned €3.4 billion ($3.8 billion) acquisition of 100 per cent of Spanish fixed-line operator Jazztel.

However, the Commission said its extensive experience in assessing cases in this sector means it is better placed to deal with the transaction and "ensure consistency in the application of merger control rules in the fixed and mobile telecommunications sectors" across the European Economic Area (EEA).

The Commission added that it would continue to cooperate closely with the Spanish competition authority in the assessment of the case, and said it has until Apr. 30 this year to take a final decision on whether the proposed transaction would significantly impede effective competition in the EEA.

In December, the Commission opened an in-depth investigation to assess whether such a deal would be in line with European Union merger regulation. Orange said at the time that it "maintains its ambition to close the operation during the first half of 2015."

The France-based operator, which competes in Spain with Telefónica, Vodafone, and Yoigo, launched its "friendly" offer for Jazztel in mid-September.

Buying Jazztel would put Orange on a more level playing field in a market where bundles of fixed and mobile services have become a dominant play. Telefónica already offers a strong quad-play proposition with the Movistar Fusion bundles of fixed and mobile voice and data services combined with TV, while Vodafone Spain enhanced its position with the acquisition of Spanish cable operator Ono.

Yoigo's parent TeliaSonera is also reviewing its options for the Spanish market: in July 2014 the Sweden-based company said its Spanish business remains sub-scale with a market share of around 7 per cent.

For more:
- see this statement by the European Commission

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Orange offers €3.4B for Spain's Jazztel
Fixed-mobile convergence sizzles as one of the hottest trends in European telecoms
Vodafone completes Ono buy, amends FTTH agreement with Orange Spain

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