(Finance) – The European Commission has approvedpursuant to the Foreign Subsidies Regulation (FSR), theacquisition by Emirates Telecommunications Group Company (e&) of sole control of PPF Telecom Group (PPF), excluding its Czech business, subject to certain conditions. The approval is subject to full compliance with the commitments offered by the parties. The decision is the result of an in-depth investigation into the proposed acquisition.
And& It is a telecommunications operator based in the United Arab Emirates (UAE) controlled by a UAE-controlled sovereign wealth fund, the Emirates Investment Authority (EIA). PPFheadquartered in the Netherlands, is a telecommunications operator in the Czech Republic, Bulgaria, Hungary, Serbia (Yettel) and Slovakia (O2). These activities include telecommunications companies and the underlying infrastructure. In total, PPF serves over 10 million customers in this sector.
To address the Commission’s concerns, e& and EIA have offered a commitment package consisting of: a commitment that e&’s statutes will not deviate from the standard UAE bankruptcy law, thereby removing the unlimited state guarantee; ban on any financing by EIA and e& to PPF activities in the EU internal market, subject to certain exceptions regarding extra-EU activities and “emergency financing”, which will be subject to review by the Commission, as well as the requirement that other transactions between such companies take place on market terms; a requirement which e& inform the Commission of future acquisitions which are not notifiable concentrations under the FSR.
“Today we are taking our first final decision under the Foreign Subsidies Regulation,” he commented. Margrethe Vestager, Executive Vice President Competition Policy Officer – We found that e& benefited from subsidies from the United Arab Emirates that would have given the merged entity an unfair advantage and could have distorted fair competition in the telecommunications sector. Today’s decision marks a positive outcome to these proceedings, thanks to the parties’ cooperation and their willingness to offer a comprehensive set of remedies to address our concerns.”