TeliaSonera, Telenor abandon Danish merger

TeliaSonera and Telenor abandoned plans to merge their respective Danish operations after being unable to agree to concessions that would have alleviated European Commission (EC) concerns over the impact of the deal on competition in the market.

In a statement, TeliaSonera said merger talks between the operators and the EC have "now reached a point where it is no longer possible to gain approval for the proposed transaction."

The announcement is a dramatic turnaround from the companies' bullish position that the deal would be approved by EC regulators during the second half of 2015 -- a view the pair had maintained since first announcing the plan in December 2014.

Robert Andersson, EVP and head of Region Europe at TeliaSonera, said the operators believed the merger was the best way to meet a need for increased investment in the Danish market. "In our view, creating a market player with the scale and ability to compete and invest would ensure that customers and businesses would benefit from better quality, speed and coverage."

However, TeliaSonera stated that the companies decided to abandon the plan after concluding that it would not be possible to create a "robust mobile operator" based on the EC's conditions.

"In the interests of both companies, we felt it necessary to act decisively," Kjell Morten Johnsen, EVP and head of Telenor Region Europe said.

Johnsen added that the operators would "continue to compete and deliver products and services in the Danish market through our respective original, and still fully up-and-running Danish operations."

The operator made no mention of what will happen to a management team the companies established for the planned joint venture, stating only that each company would continue to review their strategic options for the Danish market.

Fresh concessions aimed at gaining EC clearance for the deal were reportedly in the works as recently as late August.

At that time, sources told Reuters that the operators were prepared to sell additional spectrum space to Three Denmark in order to appease EC concerns about the impact of the merger. The news agency reported that TeliaSonera and Telenor had already offered to sell two blocks of 2100 MHz spectrum and rent out 15 per cent of the merged operator's network capacity to a new player to ensure competition in the Danish market remained robust.

For more:
- see this TeliaSonera statement
- read this Reuters report

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