The European Commission has given the green light to the proposed merger between Ziggo, the Dutch cable-television operator held by media company Liberty Global, and mobile phone operator Vodafone.
In February, Vodafone and Liberty Global agreed a deal to combine their operations in the Netherlands. Vodafone is set to invest €1bn ($1.1bn) in the joint venture, which will create the second-largest telco in the country after KPN.
In a joint statement, Vodafone and Ziggo welcomed the EC’s approval, which contains one commitment – the sale of the consumer fixed line business from Vodafone, which offers fixed telephony, broadband access and television services.
The two companies said: “This represents a structural remedy offered by the parties to address any concerns regarding the overlap between the fixed telecoms and TV activities of Vodafone and Ziggo in the Netherlands. Having already received a number of expressions of interest, the parties will now proceed with the sale process.”
The Commission had raised concerns that the proposed transaction would have eliminated the benefits brought to the Dutch telecoms market by Vodafone’s recent entry. However, it said the divestment offered by Vodafone fully addresses these concerns, allowing the Commission to clear the merger in Phase One. In parallel, the Commission also rejected a request to refer the assessment of the transaction to the Dutch competition authority.
The Netherlands Authority for Consumer & Markets (ACM) last month asked the European Commission for permission to handle the proposed merger. The EC had default authority over the matter automatically due to the size of the companies’ combined sales.
Commissioner in charge of competition policy Margrethe Vestager said: “The telecoms market is of strategic importance for our digital society. The commitments offered by Vodafone ensure that Dutch consumers will continue to enjoy competitive prices and good choice.”
Ziggo, which is a major broadcaster of sport in the Netherlands, is the largest pay-television service in the country. Ziggo launched a new sports channel, Ziggo Sport, in November. Ziggo was formerly known as Sport1.
Vodafone started talks with Liberty about establishing a joint venture in the Netherlands in February after the two parties failed to agree a broader collaboration last year that would have covered up to seven European countries.