Orange has announced that it remains confident of completing its acquisition of Spanish broadband provider Jazztel, even after the European Commission confirmed it would be carrying out an in-depth investigation of the proposed takeover. “The time limit for this new phase of the proceeding is already included in the schedule for the deal,” said the French group in a statement, adding that “Orange maintains its ambition to close the operation during the first half of 2015.” The company was responding to an earlier statement from the EC’s competition authority setting a 24 April deadline to rule on the deal. “The loss of Jazztel as an important competitive force could lead to price increases for these services for customers in Spain,” said the Commission. “Both companies are important competitive forces with a stronger influence on the competitive dynamics in these markets than suggested by their market shares."
On 16 September Orange offered EUR 3.4 billion in cash to acquire 100 percent of Jazztel’s shares, a transaction that would enable the French group to move ahead of Vodafone into second place in the Spanish fixed broadband sector thanks to Jazztel’s 1.5 million customers. If the deal goes through, 90 percent of the Spanish telecoms sector would be controlled by three operators – Telefonica, Orange and Vodafone – after the latter finalised its EUR 7.2 billion acquisition of broadband provider Ono earlier this year.
Commenting on the EC’s opening of an in-depth investigation, Orange CEO Stephane Richard said he had been "surprised" by the decision, pointing out that Vodafone’s purchase of Ono had been cleared without such a probe. However, he added that he still expected a favourable outcome, since any conditions set by the EC were unlikely to be stringent enough to disrupt his company's plans.
