German regulators express reservations over Telefónica-E-Plus deal

16 June 2014 | Kavit Majithia


German anti-trust regulators have raised further concerns over Telefónica’s planned acquisition of KPN-owned E-Plus, as the deal moves closer to completion.

The €8.8 billion merger, which will be one of the biggest in Europe in recent times, could be met with further intervention from German authorities after the European Commission voiced its concerns that the deal would affect competition and hike prices.

The national competition authority in Germany has now voiced reservations over Telefónica’s proposed concessions, which are intended to push the deal through.

There are concerns coming from Germany that Telefónica’s commitment to give rival operators access to infrastructure as part of the deal will not be enough to compensate for the reduction in the number of operating players in the country’s mobile market from four to three.

Brussels has agreed to the deal as part of its measures to increase competition in Europe, but German opposition poses a serious threat to its completion.

Shareholders in the companies believed Telefónica’s remedies would showcase enough plans for competition in Germany between the operators, including allowing rival operators to use parts of the merged entity’s network.

According to the Financial Times, the German watchdog also believes that Telefónica’s proposals for providing access to their network on a wholesale basis will not work.

There are also reservations over the deal due to the fact that E-Plus continues to operate as a successful business.

A decision on the deal is expected at the beginning of next month.