Brussels, 3 July 2012
The European Commission has cleared the proposed acquisition of Cable & Wireless Worldwide Plc ("CWW") by Vodafone Group Plc under the EU Merger Regulation. Both companies provide fixed and mobile telecommunications services in the European Economic Area (EEA). The Commission concluded that the transaction would raise no competition concerns, as the parties' activities are largely complementary. CWW's main activity is related to fixed telecoms, whereas Vodafone is mainly active in mobile telecoms.
Vodafone and CWW's activities overlap in a number of markets in the fixed and mobile telecommunications markets in the UK. However, the Commission found that the impact of the transaction on these markets is likely to be small as the combined entity would continue to face significant competition from other market players post-transaction.
The transaction also gives rise to a number of vertical relationships in the fixed and mobile telecommunication markets mainly in the UK and Ireland. In particular, Vodafone would be able to use the assets of CWW in delivering fixed-mobile combined services to end-users. However, the Commission's investigation showed that the parties would not be able to shut out fixed or mobile operators from the markets for combined fixed-mobile services, because of the parties' lack of sufficient market power. Operators sell bundled fixed and mobile services via fixed or mobile resale agreements or partnerships and will still be able to do so in the future. With regard to Unified Communications ("UC") services, i.e. a set of products/services that provides a consistent unified user interface and user experience across multiple devices and media types, including fixed and mobile, there are many other competitors offering such services. Moreover, joint purchasing of mobile and fixed as one package has been the exception, rather than the rule, up to now. Finally, telecoms regulators have the possibility to, and also do intervene in some of the markets concerned and can therefore constrain the merged entity.
The Commission therefore concluded that the transaction would not significantly impede effective competition in the EEA or any substantial part of it.
The transaction was notified to the Commission on 29 May 2012.
Both Vodafone and CWW provide fixed and mobile telecommunications services in the EEA. However, the Parties' activities are largely complementary as CWW mainly is active in relation to fixed telecoms, whereas Vodafone mainly is active in mobile telecoms.
Merger control rules and procedures
The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.
The vast majority of mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).
More information on the case is available at:
Antoine Colombani (+32 2 297 45 13)
Marisa Gonzalez Iglesias (+32 2 295 19 25)