The European Commission has approved Orange’s proposed acquisition of VOO in Belgium following a lengthy competition investigation.
Orange had to agree to provide rival Telenet access to its fixed infrastructure in the Walloon region and parts of Brussels to get the Commission onside, but we knew that was coming; the telco brokered such a deal with Telenet in January, subject to completion of the planned takeover.
That network access deal proved sufficient to satisfy the Commission.
“These commitments fully address the competition concerns identified by the Commission. The Commission therefore concluded that the proposed transaction, as modified by the commitments, would no longer raise competition concerns,” it said in a statement announcing its decision.
Orange agreed to acquire 75% minus one share of regional quad-play services operator VOO in late 2021, via a deal that valued the whole of VOO at €1.8 billion. While the deal made a lot of sense for Orange, the Commission expressed concerns that it would reduce the number of operators from three to two in areas covered by VOO and Brutélé’s own fixed networks; reduce competition in the fixed Internet, audio-visual, and multi-play markets; and reduce retail price competition in the affected markets. Voo and Brutélé together operate a collection of cable companies that use the VOO brand, incidentally.
“With our in-depth investigation, we want to make sure that the acquisition of Voo/Brutélé by Orange does not lead to higher prices or less quality for customers in Wallonia and parts of Brussels,” European Commission Executive Vice-President Margrethe Vestager said, in July.
To address those concerns, Orange agreed to provide Liberty Global’s Telenet with access to the existing fixed network infrastructure it is acquiring from VOO and Brutélé in the Walloon region and parts of Brussels, and to its own future fibre-to-the-premises (FTTP) network for at least 10 years.
“The proposed commitments effectively replace Orange, an access seeker on the VOO and Brutélé networks in the Walloon region and parts of Brussels, by Telenet, which will be the new access seeker on those networks,” the Commission said, describing Telenet as “a reputable player with a proven track record on the fixed and mobile telecommunications markets.”
Essentially, it has a strengthened competitor it is happy with.
Orange said that as a result of the Commission’s decision it expects to be able to close the deal by the end of the second quarter.
“After more than 25 years of Orange’s presence in Belgium, the acquisition of VOO is a major step and will enable us to operate a very high-speed network in Wallonia and part of Brussels, thereby reinforcing the deployment of our convergent multigigabit strategy at a national level,” said Xavier Pichon, CEO of Orange Belgium. “Our ambitious investment plan, in combination with VOO’s and Orange’s skills and expertise, will strengthen the quality of our offers to the customers and ensure competitiveness in the Walloon and Brussels regions.”
Customers will clearly hope that that proves to be the case. The broader industry, meanwhile, doubtless hopes that the decision signals a softening on in-market M&A on the part of the European Commission.
Source: https://telecoms.com/520742/orange-gets-green-light-for-voo-deal/
