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EU opens probe into €18.4bn Vodafone, Liberty Global deal

Staff Writer |
The European Commission (EC) has opened an in-depth investigation to assess Vodafone's proposed acquisition of Liberty Global's business in Czechia, Germany, Hungary and Romania under the EU Merger Regulation.

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The Commission is concerned the takeover may reduce competition in Germany and Czechia.

In Czechia, Hungary and Romania, Vodafone is mainly active as a mobile network operator, and Liberty Global as a fixed telecommunications operator.

In Germany, Vodafone and Liberty Global operate non-overlapping coaxial cable networks (i.e., networks that cover different areas and regions). Vodafone is also active in areas where Liberty Global offers cable services via wholesale access to Deutsche Telekom's xDSL network.

Vodafone and Unitymedia (Liberty Global's subsidiary in Germany) currently compete against each other in areas served by Unitymedia via cable on the retail fixed telecommunications markets and on the retail TV markets.

The Commission has concerns that the transaction would eliminate competition between the merging companies, reduce the number of players and limit the merged entity's incentives to compete effectively with the remaining operators, both in areas already served by Unitymedia and in Germany as a whole.

The proposed transaction could eliminate competition between the merging companies in terms of investment in next generation networks

The transaction could substantially increase the bargaining power of the merged entity vis-à-vis TV broadcasters. This, in turn, could negatively impact these broadcasters' ability to stay competitive and to invest.

At this stage, the Commission has not identified any specific competition concerns relating to the proposed merger for the Hungarian and Romanian markets.

The Commission will now carry out an in-depth investigation into the effects of the transaction to determine whether its initial competition concerns are confirmed.

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