THE HAGUE (dpa-AFX) - The European Commission said Wednesday that it has approved the proposed acquisition of Dutch Telecom operator Royal KPN NV's (KPN, KKPNY.PK, KKPNF.PK) German mobile telecommunications business E-Plus by Telefonica Deutschland Holding, a part of Spanish telecom group Telefónica S.A. (TEF, TDE.L).
According to the EU, the approval is conditional upon the full implementation of a commitments package submitted by Telefónica.
The Commission had concerned that the merger deal, as initially notified, would have removed two close competitors and important competitive forces from the German mobile telecommunications market and that it would have further weakened the position of Mobile Virtual Network Operators or MVNOs and Service Providers to the detriment of consumers.
However, Telefónica submitted commitments to address these concerns, ensuring that new competitors will enter the mobile telecommunications market in Germany and that the position of existing competitors is strengthened. These commitments remove the Commission's concerns, the EU said.
Telefónica commits to sell, before the acquisition is completed, up to 30% of the merged company's network capacity to one or several (up to three) MVNO(s) in Germany at fixed payments. Telefónica commits to offer to divest radio wave spectrum and certain assets either to a new MNO entrant or subsequently to the MVNO(s) who will have taken up the network capacity thanks to the first part of the commitments.
Telefónica commits to extend existing wholesale agreements with Telefónica's and E-Plus' partners and to offer wholesale 4G services to all interested players in the future. In addition, Telefónica commits to improve its wholesale partners' ability to switch their customers from one MNO to another.
It was on July 23 that Telefónica Deutschland Holding AG agreed to acquire E-Plus from Dutch telecom firm Royal KPN NV. The deal would see KPN receiving 3.7 billion euros in cash and an initial stake of 24.9 percent in Telefónica Deutschland.
In a separate press release, Telefonica Deutschland confirmed that it has received the EU Commission's conditional clearance to acquire the E-Plus Group from the Dutch telecommunication corporation KPN. It said that the merger clearance is important milestone for the company.
The company also stated that it will continue to focus on its mobile data strategy and confirms the expected synergies from the transaction of more than 5 billion euros, net present value. It remains confident in closing the acquisition of E-plus during the third- quarter of 2014.
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