Orange on Tuesday got the go-ahead from the European Commission for its €3.4 billion takeover of Spain’s Jazztel, after ag reeing concessions that will facilitate the entry of a new competitor.
Orange has agreed to divest a fibre-to-the-home (FTTH) network covering 700,000-800,000 premises. The network covers 13 urban districts located in five of the country’s largest cities: Barcelona, Madrid, Malaga, Seville and Valencia.
The buyer will be granted wholesale access to Jazztel’s ADSL network for up to eight years for an unlimited number of subscribers, allowing it to compete for customers in 78% of Spain’s territory.
Furthermore, Orange has also committed to grant the buyer of the FTTH network wholesale access to its mobile network, including 4G, unless said buyer already has access to a mobile network.
"With the remedies in this merger a new player may enter the market and compete as strongly as Orange and Jazztel do today," said European competition commissioner Margrethe Vestager, in a statement.
Orange made a €13-per-share offer for Jazztel in September 2014, valuing the fixed-line provider and MVNO at €3.4 billion.
The combination will create the country’s second-largest fixed broadband provider with 3.6 million broadband customers and 14.7 million mobile customers at the end of March. The deal is also expected to generate €1.3 billion in synergies.
The transaction is still subject to approval from Spain’s market regulator, the Comisión Nacional del Mercado de Valores (CNMV).
