News
The European Commission has expressed concern over the acquisition’s funding
The European Commission (EC) has opened an investigation into UAE-based operator e&’s acquisition of Czech telco group PPF over concerns that it has been “granted foreign subsidies that could distort the EU internal market”.
Last year, e& made a strategic expansion into the European market by moving to acquire a majority stake in PPF Telecom’s telecoms and infrastructure units in Bulgaria, Hungary, Serbia, and Slovakia. Currently, PPF has 18.1 million mobile subscribers, 1.4 million fixed broadband customers, and 13.2 thousand employees, across these four markets and its home market of the Czech Republic (which was excluded from the deal).
The EC believes that e&’s “alleged subsidies” consist of an unlimited guarantee from the UAE government and a loan from UAE banks that have directly funded the transaction. Such subsidies distort the internal market of the EU by giving PPF an unfair advantage in the market, and is therefore a potential violation of newly introduced competition rules.
This regulation came into effect on 12 July 2023 – just weeks before the e& deal was announced – and allows the commission to investigate distortions caused to EU markets by foreign subsidies.
The EC will assess two things: firstly, whether foreign funding would lead to negative effects on the acquisition process, such as deterring other interested parties from acquiring;0 secondly, whether foreign funding will have negative effects on the internal market after the merger is completed.
“e& continues to be in constructive discussions with the European Commission on its proposed acquisition of a majority stake in PPF Telecom Group and is working cooperatively towards a conclusion of the authority’s review,” the company said in an email to Reuters.
A decision is expected from the EC by 15 October.
Keep up to date with the latest telecoms news by subscribing to the Total Telecom daily newsletter
Also in the news:
AI is shaking up the submarine cable ecosystem
Cyber and other threats to submarine cables
Old copper networks: A gold mine for telcos?
