EU, not Spain, to rule on Orange, Jazztel merger

2 December 2014. By Dafydd Nelson and Christiaan Nelisse.

The European Commission has decided that it will rule on Orange's plan to buy Spanish broadband provider Jazztel, rebuffing a request from Spain's competition authority to investigate the deal at the national level, MLex has learned.

The EU watchdog is expected to either clear the merger or open an in-depth review of the transaction by this Thursday, Dec. 4.

Commission officials are believed to favor a phase II investigation, it is understood. New EU competition chief Margrethe Vestager will make the final decision.

Last month, the commission extended its initial investigation by 10 working days following a request from the Spanish regulator to take over the review.

In response, Orange submitted concessions to the EU authority to ease potential concerns that the deal might hinder competition. That move indicated that the French telecom operator would prefer to see the EU rule on the deal. No details about the package were made public.

The commission hasn't asked customers and rivals for feedback on the remedies, MLex has learned.

Orange agreed in September to buy Jazztel in a deal worth 3.4 billion euros ($4.2 billion).

Announcing the merger, Orange Chief Executive Stéphane Richard said it would be "appropriate" for the EU to approve the deal during an initial, phase I investigation.

But the commission was expected to take a close look at agreements Orange and Jazztel have with rivals concerning access and network development.

Jazztel's shares trade on the Bolsa de Madrid. Orange is listed in Paris and New York.

The commission's case file number is M.7421.