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Danish telcos hang up on merger plans after EU pressure

Three-O2 merger still in balance as EU stance seen as harbinger of things to come

Telenor and TeliaSonera have abandoned their merger plans following pressure from the European Commission.

In an official statement on Friday, the pair called off the deal as they were unable to meet the Brussels competition watchdog’s demands. The Commish opened an in-depth investigation into the deal in April.

“The merger discussions have now reached a point where it is no longer possible to gain approval for the proposed transaction,” the companies said this morning (September 11).

TeliaSonera and Telenor – the second and third-largest players on the Danish market – announced the merger plans in December. But the EU’s competition chief Margrethe Vestager was concerned that consumers would suffer from a lack of competition if the two teamed up.

TeliaSonera offered to divest a stake in its network, but in what was seen as an indication of how she will rule on future mergers, Vestager said this was not good enough.

“EU merger control has to make sure that company tie-ups do not lead to reduced innovation, higher prices or reduced choice for consumers and do not restrict competition in the internal market,” she said.

“Every case has to be assessed on its own facts and merits. In this specific case, based on the Commission's in-depth analysis and evidence gathered, we are convinced that the significant competition concerns required an equally significant remedy. What the parties offered was not sufficient to avoid harm to competition in Danish mobile markets,” said Vestager.

After less than one year in the job, Danish Vestager is already seen as much tougher than her predecessor – she imposed tough conditions on a merger in May between Spanish operators Orange and Jazztel.

In the UK, Three and O2’s merger – announced earlier this yearm – has led to complicated pre-notification discussions with the Commission. ®

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