EC set to issue preliminary ruling on Vodafone, Liberty Global Dutch JV by mid-July

Vodafone and Liberty Global placed the future of a planned merger of their Dutch operations in the hands of the European Commission, which is expected to issue the outcome of an initial review by Jul. 19.

Options available to the EC include opening a full blown investigation into the merger proposition or approving the deal, Reuters reported. If the EC chooses the latter option it must decide whether or not to impose conditions, the news agency added.

While Vodafone announced plans to create a 50-50 joint venture combining its Dutch mobile network with Liberty Global's Ziggo cable broadband network in February, the pair only submitted the deal to EC competition authorities this week, Reuters explained.

The proposed merger would create the second largest telecoms service provider in the country behind KPN, with some 4.2 million video, 3.2 million broadband, 2.6 million fixed-line telephony, and 5.3 million mobile subscribers.

When the duo announced the joint venture, they stated that the plan would generate annual savings in the region of €280 million ($315 million) in the fifth year after the deal was closed. They expected to complete the merger by the end of 2016.

The EC may opt for a full investigation of the plan if it believes the combination will increase the cost of services for consumers, Reuters noted.

Such concerns have recently resulted in the commission blocking other planned mergers, including CK Hutchison's bid to acquire O2 UK and Telia and Telenor's attempt to merge their Danish businesses.

Dutch research company Conclusr Research in March predicted the merger of Vodafone with Ziggo would likely result in higher prices for Dutch business customers due to the reduction in the number of telecoms service providers in the market.

Conclusr CEO Ton Ketelaars told FierceWireless:Europe that the combined Vodafone/Ziggo "will dominate the market," which would be sufficient enough a reason for EU or Dutch competition regulators to "say this is not a good development."

For more:
- see this Reuters report

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