The European Commission (EC) confirmed Wednesday that it has commenced an in-depth investigation into a planned merger between TeliaSonera and Telenor that would reduce the number of wireless competitors in Denmark from four to three.
Announced last December, the proposed transaction would combine the Danish operations of TeliaSonera and Telenor—the second- and third-largest wireless carriers in Denmark—into a 50-50 joint venture that the companies hope will emerge as a more forceful competitor against national market leader TDC. If approved, the merged entity would command a market share of approximately 40% and annual revenues in excess of U.S. $1.3 billion. Unveiling the EC probe, newly-appointed EC Competition Commissioner Margrethe Vestager voiced concern with the competitive effect of the proposed merger on TDC and on Hi3G, Denmark’s fourth-ranked mobile operator, warning that the deal could lead to “higher prices, loss of innovative offers and lower quality.” Vestager further cautioned that the transaction could result in “coordination between the remaining operators.”
The EC is expected to conclude the investigation within 90 days and to hand down its decision by August 19. As a Telenor official voiced a lack of surprise at the EC’s move “given that other transactions in the European mobile industry have been the subject of in-depth investigations in recent years,” TeliaSonera CEO Johan Dennelind commented that his company remains “confident that the merger will be approved during 2015.”