The European Commission has paused its investigation into Orange’s planned takeover of Spain’s Jazztel, but the French telco believes proceedings will restart next week and that the hiatus will not affect its ability to close the deal.
Orange on Friday confirmed that the probe is on hold, "probably until 24 March."
The European competition body will make an announcement when the investigation resumes, a Commission spokesperson told Total Telecom.
Neither Orange nor the Commission was willing to comment on the reason for the suspension. However, we believe that the Commission has requested further documentation from Orange related to the acquisition.
Orange was keen to emphasise that this kind of "stop the clock" delay is relatively common in cases like these.
"Orange remains firmly committed to continuing its discussions with the Commission during this suspension period," a spokesperson for the company said. "Orange remains confident that it will secure a positive outcome to this process but cannot elaborate further at this stage," the telco added.
Orange made a €13-per-share offer for Jazztel in September, valuing the fixed-line provider and MVNO at €3.4 billion.
Merging Jazztel with Orange will create a stronger competitor for incumbent operator Telefonica. The pair had a total of 3.12 million broadba nd lines at the end of 2014, giving them a 25.5% share of the market, according to statistics from national regulator the CNMC. Telefonica’s broadband market share stood at close to 47% at the same date.
The pair suggested certain remedies designed to protect competition in the event of their merger, but these were deemed insufficient by the European Commission, which opened an in-depth investigation into the deal late last year.
"The Commission has concerns that the proposed transaction may lead to a significant loss of competitive pressure for fixed Internet access services and fixed-mobile multiple play offers," the European Commission said at the time.
"The loss of Jazztel as an important competitive force could lead to price increases for these services for customers in Spain," it warned.
There have been a number of delays in the investigation since then.
Orange initially aimed to complete the deal in the first half of this year. It has given no indication that anything has changed in this regard.
