PARIS (dpa-AFX) - The European Commission has approved the proposed acquisition of Jazztel plc (JAZTF.PK), a telecommunications company registered in the UK but mainly active in Spain, by rival Orange SA of France.
The approval is conditional upon the full implementation by Orange of a number of commitments that will ensure effective competition on the fixed internet access services markets after the takeover.
Orange has committed to divest an independent Fibre-To-The-Home (FTTH) network covering 700 000 - 800 000 building units, which is similar to the size of Orange's current FTTH network in Spain.
Orange has committed to grant the purchaser of the FTTH network wholesale access to Jazztel's national ADSL network for up to 8 years. This commitment is for an unlimited number of subscribers and will allow the purchaser to compete immediately on 78% of Spanish territory.
Separately, Orange said it welcomes the authorization by the European Commission of the proposed acquisition of Jazztel.
The proposed acquisition of Jazztel aims to give rise to the second-largest fixed broadband operator and one of the most dynamic players in the Spanish mobile market. Also, Orange plans to significantly accelerate fibre deployment in Spain in the coming years. By the end of 2016, more than 10 million Spanish building units will be able to benefit from Orange's fibre offers.
This deal is expected to generate total synergies for the combined business estimated at 1.3 billion euros, in particular through the savings achieved in operating costs and network investments.
In September 2014, French telecom major Orange SA (ORAN), previously known as France Telecom, said it would launch a friendly voluntary tender offer to acquire Spanish broadband provider Jazztel Plc for 13 euros per share or about 3.4 billion euros or $4.3 billion in cash.
Copyright RTT News/dpa-AFX