EC expands scrutiny of Orange’s Jazztel bid

The European Commission (EC) has decided to expand on its assessment of the proposed acquisition bid by Orange for Jazztel. The EC announced the in-depth investigation is to determine whether the proposed acquisition is in line with EU merger regulation.

The proposed transaction would see the French telco take over UK-registered Jazztel, which mainly operates in Spain where Orange also has both mobile and fixed networks. Jazztel operates a fixed network, and offers mobile coverage over Orange’s infrastructure.

The EC said that although the acquisition wouldn’t create a dominant force in the Spanish market, which currently has four fixed line providers and four mobile operators, the concern is the transaction would lead to significantly reduced competitive pressure for fixed internet and fixed-mobile multi-play offers.

“The Commission will now investigate the proposed transaction in-depth in order to determine whether its competition concerns are confirmed or not,” the EC said in a statement.

“It will also analyse the impact of the transaction on the Fibre-to-the-Home (FttH) deployment currently carried out by Orange and Jazztel and in particular whether it could reduce their FttH footprint as compared to a stand-alone scenario.”

A decision on the matter must be made within 90 days, making the deadline for the EC 24 April 2015. Orange claimed this will not delay its venture saying the deadline falls within the original timeline it had set.

“The Orange Group continues proceedings for the acquisition of Jazztel and reaffirms its confidence in the favourable outcome of this deal, which aims to give rise to the market’s second-ranked fixed broadband operator and one of the most dynamic players in the Spanish mobile market,” Orange said in a statement.

“In doing so, Orange plans to accelerate customer convergence and its growth in a highly-competitive market.

The Jazztel bid is the biggest Orange has made in years. The Spanish market has seen some consolidation activity lately, including Vodafone’s €7 billion acquisition of cable firm Ono earlier this year.