EU watchdog gives e& the all-clear: Telecoms giant e& will move forward with the acquisition of a controlling stake (50% +1 economic share) of PPF Telecom Group, excluding its Czech business, according to an ADX disclosure (pdf), after the European Commission gave the acquisition its approval yesterday.

The decision arrived sooner than expected, with the commission having moved the deadline to clear or block the bid on 4 December, after the initial deadline for the decision was set for 15 October.

REFRESHER- The European Commission launched its first-ever anti-subsidy probe into a foreign buyer against e& in June. The telecoms giant had agreed to acquire a 50% stake plus one share in the telecommunication operator for EUR 2.5 bn (AED 9.9 bn). PPF, based in the Netherlands, operates telecom services in Czechia, Bulgaria, Hungary, Serbia (under Yettel), and Slovakia (under O2), serving over 10 mn customers across these markets.

The probe concluded that market competition will not be impacted by the acquisition: Subsidies provided to e& and the Emirates Investment Authority (EIA), the body in charge of the telco, in the form of various grants, loans, and debt instruments, “did not lead to actual or potential negative effects on competition in the acquisition process,” the commission said.

Some strings attached: e& agreed to several conditions, including a pledge to comply with UAE bankruptcy law to prevent unlimited state funding. e& also agreed not to funnel any EIA financing into PPF’s EU operations, with exceptions for non-EU activities and emergency funding — both subject to EU review. Lastly, all future transactions between e& and PPF must meet EU market terms, with e& required to notify the commission of any acquisitions that do not fall within the scope of its foreign subsidies regulation.

The commitments will be valid for 10 years, and extendable for another five years, the statement said. An independent trustee will be monitoring e&’s fulfillment of its commitments, the statement said.

The EU has seen a rising wave of protectionism that has pulled the plug on several overseas transactions from the region. 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. Meanwhile, the Spanish government has been trying to edge out Saudi telecoms operator Stc as a major shareholder, after it became mobile network operator Telefonica’s largest shareholder.

The story got ink in Reuters.

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