Brussels, 15 April 2014
Mergers: Commission approves acquisition of GTS Central Europe by Deutsche Telekom
The European Commission has cleared under the EU Merger Regulation the proposed acquisition of telecommunications company GTS Central Europe ("GTS") of Luxembourg by rival Deutsche Telekom ("DT") of Germany. The Commission concluded that the transaction would not raise competition concerns, because the merged entity would continue to face strong competition after the merger and customers would still have sufficient alternative suppliers in all markets affected.
The Commission examined the effects of the merger on competition in several markets in Hungary, Romania, the Czech Republic and Poland, where the parties have overlapping activities or vertical links. GTS' Slovak business is not concerned by this transaction.
The activities of the two companies overlap in the markets for wholesale leased lines and retail business connectivity in Hungary and Romania as well as in the markets for domestic call transit services in the Czech Republic and Hungary. The Commission concluded that the acquisition would not raise any competition concerns in these markets. The Commission found, in particular, that other strong players, such as Invitel and UPC in Hungary, Telefonica and Dial Telecom in the Czech Republic and Orange and Vodafone in Romania, will continue to compete with the merged entity in these markets.
The Commission also assessed the impact of the transaction on a large number of markets where the merging companies are active at different levels of the supply chain. More specifically, the Commission focused on the following markets:
The Commission therefore concluded that the transaction would not raise any competition concerns in these markets.
The transaction was notified to the Commission on 11 March 2014.
Companies and products
Deutsche Telekom is active internationally in the telecommunications sector and has as its core business the provision of fixed and mobile telecommunications as well as internet and internet protocol television services to consumers mainly in Europe.
GTS Central Europe is active in the telecommunications sector and especially in the provision of telecommunications services and tailor-made information and communication technology services to business, carrier and government customers in Poland, the Czech Republic, Hungary, Romania and Slovakia.
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 notified 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).