Vodafone and Melita call off merger

Vodafone and Maltese cable operator Melita’s shareholders have called off their plans for a merger of Vodafone Malta with Melita after concluding they would not be able to satisfy the local regulator’s requirements.

Vodafone, Apax Partners Midmarket and Fortino Captial said that they had “cooperated extensively” with competition watchdog the MCAA to obtain approval for the deal. “However, it has now become clear that the parties are unable to satisfy the MCCAA’s requirements and consequently they have decided to terminate the transaction and withdraw the notification,” they said.

Vodafone and Melita’s private equity owners agreed a merger deal that valued Vodafone Malta at €208 million and Melita at €298 million in May to create a quad-play competitor to incumbent operator GO. The merger was vigorously opposed by GO and the MCAA launched an in-depth probe into the deal in July.

the regulator highlighted its view that “the concentration would significantly curtail the possibility for three players to operate in the relevant markets, as it would instead create a dominant player within a duopolistic set-up”. The MCAA said that it had “serious concerns arising from the proposed concentration with regards to the horizontal effects of the transaction in the mobile-only market, and the potential for co-ordinated and foreclosure effects in the mobile-only and multi-play markets”.

Vodafone had said that the combination of the two companies would be provide more competition by delivery the necessary scale to take on GO, and would allow customers to gain access to multi-play packages.