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Telefonica acquisition approved

August 29, 2014

The EU Commission has given its final clearance for telecoms giant Telefonica Deutschland to buy rival E-Plus in an 8.6 billion-euro deal that will see the creation of Germany's largest mobile service provider.

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O2 E-Plus (Logos)
Image: Reuters

European Union regulators gave their final approval for Telefonica Deutschland's bid to acquire German mobile operator E-Plus from the Dutch telecommunication group KPN on Friday.

The merger will create Germany's largest telecoms operator in terms of customers, with the new entity estimated to control roughly 30 percent of the market. The new entity will overtake the other two major competitors in Europe's biggest wireless market, Deutsche Telekom's T-Mobile and Vodafone.

The European Commission, which has long worried about a drop in the number of mobile phone service providers in Europe, extracted concessions from the company that are meant to maintain competition.

Telefonica pledges include helping smaller competitors enter the market, creating the possibility for another major company to set up shop, and offering wholesale 4G mobile-internet services to other players.

In order to get the regulatory clearance, Telefonica Deutschland had agreed to a deal in June with smaller rival Drillisch to sell upfront 20 percent of its mobile network capacity, with the opportunity to extend up to an additional 10 percent.

"With the final clearance of the European Commission now granted, we are able to close the transaction soon, and create a leading digital telecommunication company in Germany," said Markus Haas, chief strategy officer Telefonica Deutschland.

The company expects to close the deal during the third quarter of 2014.

sri/hg (dpa, reuters, telefonica.de)