The European Commission is investigating e&’s bid to acquire Czech PPF Telecom Group’s assets in Eastern Europe in its first anti-subsidy probe into foreign buyers, the watchdog said in a statement yesterday. The commission claims the telecoms giant received state support — in the form of a guarantee and a loan from state banks — that impacted its position to acquire the company and hampers market competition, it said in the statement.

e&’s response: The telco said in an emailed statement to Reuters and Bloomberg that it is working with the commission “towards a conclusion on the authority’s review.”

The commission has until 15 October to make a decision, it said.

BACKGROUND- . e& had agreed to acquire a 50% stake plus one share in PPF Group’s telecoms units in Bulgaria, Hungary, Serbia, and Slovakia for EUR 2.5 bn (AED 9.9) last August. Bulgaria’s Competition Protection Commission greenlit e&’s acquisition of Bulgarian mobile operator Yettel Bulgaria and telecoms infrastructure provider Cetin Bulgaria from PPF Group in February as part of the transaction, with CEO Hatem Dowidar saying in February he expected to close the acquisition a few weeks later, following the receipt of final regulatory approvals.

This comes amid a rising wave of protectionism in the EU that has seen several overseas transactions from the region blocked by governments. The UK made legislative changes to block a takeover by Abu Dhabi-based investors of newspapers the Telegraph and the Spectator, citing preserving editorial independence as a major concern.

It’s not just the UAE: A US watchdog reportedly forced Aramco Ventures’ VC fund Prosperity7 to fully divest Rain Neuromorphics, a Silicon Valley AI chip startup, in December.

OTHER M&A NEWS-

Another overseas M&A falling through? Abu Dhabi’s Taqa ended talks with Criteria Caixa over an acquisition of Spanish gas producer and renewables player Naturgy, in which Criteria is the largest shareholder, “without any agreement,” Criteria Caixa said in a filing (pdf) yesterday. The two companies were reportedly looking to “cooperate” on a potential acquisition. Criteria Caixa already owns a 26.7% stake in the company.

BACKGROUND-Taqa has been in talks with Naturgy’s largest shareholders — CVC Capital Partners, Criteria Caixa, and Global Infrastructure Partners — to potentially acquire their stakes in the Spanish company.

It’s not clear whether Taqa could still acquire GIP or CVC’s stake in the company, despite the termination of talks between the company and Criteria Caixa.

The transaction was expected to hit resistance: The Spanish government — which is also preventing foreign ownership in “strategic” companies and industries — was reportedly looking to maintain a stake in Naturgy if the acquisition went through. The Algerian government was also reportedly considering blocking the transaction, to protect its stake in the company.

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