Germany's competition authority is seeking the right to probe the €8.55 billion ($11.5 billion) deal between Telefónica and KPN that would see the two operators merge their respective German units to create the largest operator by customers and provide a stronger rival to Vodafone Germany and Deutsche Telekom.
The Telefónica Deutschland/E-Plus merger case was referred to the European Commission at the end of October, but the Bundeskartellamt said the merger "exclusively affects the German mobile communications markets" and should therefore be referred to the German competition authority.
"This case requires an in-depth examination of whether the merger between the two mobile network operators would lead to competition problems," said Andreas Mundt, president of the Bundeskartellamt.
The application by the Bundeskartellamt could lead to a dispute between the European Union's antitrust authorities, who have said they want to examine the deal, and the German body, which has the backing of the German government. The Commission now has 35 working days to decide whether to adopt the referral decision or deal with the case itself by opening an in-depth investigation.
The Telefónica Deutschland/E-Plus merger is being closely watched by market players across Europe because of the implications it could have for other M&A in the region. If the deal is approved by German or European regulators, it could spark what Orange CEO Stephane Richard recently called an "M&A earthquake" in Europe.
The deal was approved by KPN shareholders at the beginning of October.
For more:
- see this Bloomberg article
- see this Bundeskartellamt release
- see this Reuters article
Related Articles:
KPN shareholders approve sale of German E-Plus unit to Telefónica
Carlos Slim gives thumbs up to Telefónica's improved E-Plus offer
Orange CEO Richard sees M&A 'earthquake' if German merger goes ahead
KPN, Telefónica to merge German units in survival plan, but hurdles lie ahead