The European Commission has granted conditional approval for Orange Group to acquire a 54% controlling stake in Telekom Romania Communications (TKR).
The deal was first signed in November 2020, with Orange Romania agreeing to acquire the stake for EUR268 million (US$317 million). This placed TKR’s enterprise value at around EUR497 million.
The EC noted “the transaction, as initially notified, would have raised serious competition concerns in the market for retail mobile telecommunication services”, and made its approval contingent on TKR divesting its 30% holding in Telekom Romania Mobile Communications (TRMC).
Since TRMC competes directly with Orange Romania, the parent group would have gained an uncompetitive advantage if it retained a minority stake in TRMC. TeleGeography notes that the holding would have afforded Orange Group financial insight into TRMC that could have been used to harm the operator by vetoing a strategic acquisition or investment.
Orange is acquiring the stake in TKR from Greek operator OTE, which is a subsidiary of Deutsche Telekom. To allay the EC’s competition concerns, Orange has stated that it will not complete its acquisition until it has arranged and confirmed a binding agreement between OTE and TKR that will see the former buy back the latter’s stake in TRMC.