EC approves T-Mobile Austria’s €1.9bn takeover of UPC Austria

The European Commission has green-lit T-Mobile Austria’s €1.9 billion acquisition of UPC Austria after concluding that the deal would not raise competition concerns.

The EC gave its unconditional approval to the deal after ruling that the companies’ activities and assets are “largely complementary” and that the merged entity would continue to face “significant competition” from rivals like incumbent A1 Telekom Austria and Hutchison Drei Austria.

UPC’s main activities are related to fixed telecommunications, while T-Mobile Austria is mainly active in mobile telecommunications, and the EC said that there are only a limited number of markets in Austria where the two companies overlap.

It therefore concluded that the merged entity would not be able to use its market power to shut out or marginalise its fixed or mobile competitors by bundling fixed and mobile products.

“Both companies are active in the provision of internet access services for residential customers, since in Austria internet access at home is often provided through a router connected to a mobile network,” said the EC in a statement.

“However, the Commission found that the impact of the transaction on this market is likely to be limited, considering in particular that UPC’s fixed internet access products differ considerably from T-Mobile Austria’s mobile broadband products. These products differ both in terms of the underlying technology and product characteristics and as a result are not closely competing.”

T-Mobile Austria agreed to buy Liberty Global-owned cable operator UPC Austria for an enterprise value of €1.9 billion late last year, in a deal that will transform it from a mobile to a quad-play provider.

Liberty Global CEO Mike Fries commented at the time that the transaction highlights the “significant synergies inherent in fixed-mobile mergers” as well as the value of its fibre-rich networks.