Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: Telecom service firms abandon merger over EC concerns, (Sep 14, 2015)

By Linda O’Brien, J.D., LL.M.

Telecom service providers Telenor and TeliaSonera have announced that they are abandoning the proposed merger of their respective business units in Denmark, the European Commission (EC) noted on September 11. The announcement confirms that the parties’ discussions thus far were not able to fully address the Commission's competition concerns. The Commission had opened an in-depth investigation in April 2015.

In Denmark, TeliaSonera and Telenor both provide mobile and fixed telecommunications services, as well as broadband and television services. TeliaSonera provides mobile telecommunications services under its main brand Telia, as well as under sub-brands Call Me and DLG Tele. Telenor provides mobile telecommunications services under its main brand Telenor, as well as under sub-brands CBB Mobil and BiBoB. In December 2014, the companies reached an agreement to merge their Danish operations.

“Since the beginning, we have been strong advocates for the need to increase investment levels in Denmark,” said Robert Andersson, Executive Vice President and Head of Region Europe in TeliaSonera, in a statement. “In our view, creating a market player with the scale and ability to compete and invest would ensure that customers and businesses would benefit from better quality, speed and coverage.”

“In the interests of both companies, we felt it necessary to act decisively,” commented Kjell Morten Johnsen, Executive Vice President and Head of Telenor Region Europe. “TeliaSonera and Telenor will continue to compete and deliver products and services in the Danish market through our respective original, and still fully up-and-running Danish operations.”

The EC took note of the parties’ abandonment of the merger. "EU merger control has to make sure that company tie-ups do not lead to reduced innovation, higher prices or reduced choice for consumers and do not restrict competition in the internal market,” said Margrethe Vestager, Commissioner in charge of competition policy. “I believe that ensuring that markets are competitive is key both to spur much needed innovation and investment in European telecoms markets, as well as to offer affordable prices to consumers.”

“Every case has to be assessed on its own facts and merits,” Commissioner Vestager continued. “In this specific case, based on the Commission's in-depth analysis and evidence gathered, we are convinced that the significant competition concerns required an equally significant remedy. This means the creation of a fourth mobile network operator. What the parties offered was not sufficient to avoid harm to competition in Danish mobile markets."

Companies: Telenor Group; TeliaSonera AB

News: AcquisitionsMergers Antitrust