e&’s PPF deal gets European Commission nod

e&/X

UAE telecommunications company e&, formerly known as Etisalat, said that the European Commission (EC) has approved the acquisition of Czech PPF Group’s telecoms business across four European countries.

The extensive dialogue with the EC enabled the grant of foreign subsidies regulation (FSR) approval on an accelerated basis, three months ahead of the applicable legal deadline of December 4, 2024, the Abu Dhabi-listed company said in a stock market filing.

In August 2023, e& signed a binding agreement with PPF Group to acquire a 50 percent plus 1 share economic stake in both the service and infrastructure companies of PPF Telecom’s assets in Bulgaria, Hungary, Serbia and Slovakia.

The deal, however, excludes PPF Telecom’s local business in the Czech Republic.

While all regulatory approvals have been obtained, the transaction’s completion remains subject to customary closing terms.

In its report, the EC said that the approval is conditional on full compliance with the commitments offered by the parties.

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The remedies offered by e& include the removal of an unlimited state guarantee and prohibition of any financing from the Emirates Investment Authority, a sovereign fund; not to channel foreign subsidies to the activities of the merged entity in the internal market; and introduce appropriate monitoring mechanisms in particular areas of risk. These will be monitored by an independent trustee.

The commitments are valid for 10 years and can be extended by another five years or more on mutual agreement.

Alexandra Rogers, partner at global law firm Norton Rose Fulbright, said the first clearance of a merger reviewed in depth under the FSR is an important development for the parties and provides helpful guidance on navigating the new regime.

“The FSR has now been fully applicable since October 12, 2023, and the result of this case offers more transparency on the application of the new rules and the EC’s approach,” he said.

The UAE telco owns a 14.6 percent stake in London-listed Vodafone. In July, e& confirmed plans to buy a stake in Ethio, a state-controlled operator in Ethiopia.