On Wednesday 28 July, the European Commission approved the acquisition of Telekom Romania Communications (TKR) by Orange SA (Orange).
However, the approval is conditional on the divestiture of TKR’s 30% minority shareholding in Telekom Romania Mobile Communications (TRMC), which is a direct competitor of Orange.
According to Margrethe Vestager, Executive Vice-President in charge of competition policy, “the Romanian telecommunications market will continue to offer high quality communication services at competitive prices”.
Orange, through its Romanian subsidiaries, and TKR provide telecommunications services in Romania. TKR is indirectly controlled by Deutsche Telekom (DT) and holds a 30% minority stake in TRMC, one of the four main mobile operators active in Romania.
Following its investigation, the Commission found that the transaction, as initially notified, would have raised serious competition concerns on the market for retail mobile telecommunications services. Orange has reportedly acquired TKR’s 30% minority shareholding in TRMC, one of its key competitors on this market. This may have reduced Orange’s incentives to compete with TRMC and would have given it access to commercially sensitive information about its competitor.
In order to address the competition concerns identified by the Commission in relation to Orange’s proposed acquisition of the 30% minority shareholding in TRMC, Orange offered:
- to secure the divestment of TKR’s 30% minority shareholding in TRMC to Hellenic Telecommunications Organization S.A. (OTE), which is the current controlling shareholder of TRMC and a subsidiary of DT ;
- not to implement the transaction before TKR and OTE have reached a binding agreement on the divestment, that the Commission has approved both OTE as a suitable purchaser and the divestment agreement, and, finally, that the minority stake has been transferred to OTE.
These structural commitments fully remove the competition concerns identified by the Commission in the market for retail mobile telecommunications services.
Link to the case: https://bit.ly/3yeMA8q (Original version in French by Lionel Changeur)