Mergers: Commission approves acquisition of ONO by Vodafone
The European Commission has cleared the proposed acquisition of Grupo Corporativo ONO ("ONO") by Vodafone Group Plc under the EU Merger Regulation. Both companies provide fixed and mobile telecommunications services in Spain. The Commission concluded that the transaction would not raise competition concerns, as the parties' activities are largely complementary: ONO's main activity is related to fixed telecoms, whereas Vodafone is mainly active in mobile telecoms.
Vodafone and ONO's activities overlap in a number of markets in the fixed and mobile telecommunications markets in Spain. However, the Commission found that the impact of the transaction on these markets is likely to be limited as the combined entity would continue to face significant competition from other market players, such as the incumbent operator Telefónica, and other operators such as Orange and Jazztel.
The transaction also gives rise to a number of vertical and conglomerate relationships in the fixed and mobile telecommunication markets in Spain, in particular in relation to the provision of bundled multiple play services. However, the Commission's investigation indicated that the merged entity will not be able to shut out fixed or mobile operators from the markets for multiple play services, because of the availability of alternative operators and the regulatory obligations in relation to wholesale access on mobile and fixed services.
The Commission therefore concluded that the transaction would not significantly impede effective competition in Spain.
The transaction was notified to the Commission on 23 May 2014.
Both Vodafone and ONO provide fixed and mobile telecommunications services in Spain. However, the parties' activities are largely complementary as ONO mainly is active in relation to fixed telecoms, whereas Vodafone is mainly active in mobile telecoms. ONO, but not Vodafone, is also active in the provision of pay TV services.
Merger control rules and procedures
The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.
The vast majority of mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).
More information is available in the public case register on the Commission’s competition website under case number M.7231.