The European Commission (EC) revealed it is investigating UAE-based operator group e&’s acquisition of Czech telecoms company PPF Telecom's assets, due to concerns on how the group may be benefitting from state cash injections, reported Reuters.
The EC said in its preliminary investigation that there are sufficient indications that e& received foreign subsidies that distort the EU internal market. This is the first acquisition to be scrutinised by the EC under its Foreign Subsidies Regulation, which was introduced to clampdown on unfair foreign state support for their companies.
"Such subsidies may have improved e&'s capacity to perform the acquisition as well as the competitive position of the merged entity in the EU going forward, notably by improving its capacity to finance its EU activities at preferential terms," the EC said in a statement.
e& said it is working to resolve this matter with the EC. The deal if given the greenlight would give e& total control of PPF except its Czech unit. In a stock exchange filing, e& said it is aiming to seal the deal before the end of the year. The EC set a deadline of October 15 to provide its decision on the deal.
