BRUSSELS (02/09/2000) - The planned acquisition by Vodafone Airtouch PLC of Mannesmann AG will require "a thorough analysis," even though the companies have offered to divest their interest in mobile operator Orange PLC, European Competititon Commissioner Mario Monti told a press conference today.
It therefore looks likely that the operation will require an in-depth, four-month antitrust investigation by the Commission.
The European Commission has until Feb. 28 to make its initial ruling on whether it has "serious doubts" about the compatibility of the merger with EU antitrust rules that prohibit the creation or reinforcement of a dominant position. If it has serious doubts, the Commission has another four months to verify the concerns and to seek changes to the merger or acquisition to correct them.
Where companies fail to make sufficient changes, the Commission can prohibit a merger or acquisition concerning large cross-border operations.
In response to questions about the status of the EU's current investigation, the Commissioner explained that his services are examining horizontal overlaps, referring to the risk that the merger will eliminate competition between competing activities of the separate companies regarding network operations, the provision of global services, fixed to mobile links, and roaming operations.
This in turn will lead to a vertical integration or concentration of these activities.
As a gesture to meet the Commission's competition concerns, the companies have already offered to divest their interest in Orange, the U.K. mobile company, the Commissioner confirmed.
"The merger task force (the Commission service responsible for the review) will look closely at this proposed remedy while analyzing the entire operation," Monti stressed.
Vodafone and Mannesmann agreed last week to a 180 billion euro (US$180 billion) merger, which will create the world's biggest telecommunications firm.