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Orange and MasMovil Tie-Up Set to Secure Conditional EU Antitrust Approval

 |  January 17, 2024

French telecommunications giant Orange and its Spanish counterpart, MasMovil, are poised to receive conditional approval from the European Union (EU) for their proposed merger in Spain.

This comes as a potential shift in the EU’s approach to antitrust regulations, responding to calls from telecom companies to reconsider stringent stances on mergers that reduce the number of mobile players in a country, reported Reuters.

Orange and MasMovil, ranking as the second and fourth-largest telecom providers in Spain, respectively, unveiled their merger plan with an enterprise value of 18.6 billion euros ($20.2 billion) in July 2022. The deal has been under scrutiny by EU antitrust regulators, with concerns raised about potential impacts on competition and consumer prices in the Spanish telecommunications market.

Sources with direct knowledge of the matter revealed that the European Commission is likely to grant approval under certain conditions. One key condition involves Romania’s Digi acquiring spectrum from MasMovil. Additionally, the approval is contingent on Orange entering into a national roaming service agreement.

In response to these requirements, Digi, as outlined in a regulatory filing in December, confirmed a 120-million-euro spectrum transfer agreement with an additional 20 million euros component with MasMovil. Moreover, Digi secured an option for a national roaming service agreement with Orange’s Spanish unit.

Related: EU To Warn Orange Over $19 Billion Masmovil Deal

The European Commission, set to make a final decision on the merger by February 15, has not officially commented on the matter. However, last year, the EU competition enforcer issued a warning, expressing concerns that the Orange-MasMovil tie-up might lead to reduced competition and increased prices in the Spanish telecommunications market.

This development reflects ongoing debates within the telecom industry, with companies urging EU antitrust regulators to adopt a more flexible approach to mergers that could reshape the competitive landscape. If approved, the Orange-MasMovil merger could pave the way for further consolidation in the European telecom sector, prompting industry players to reassess their strategies in the evolving regulatory environment.

As the deadline for the European Commission’s decision approaches, stakeholders and industry observers will be closely monitoring the outcome and its potential implications for the broader telecom market in Europe.

Source: Reuters