Mobile telecommunications company Yettel Bulgaria has submitted a request to the Commission for Protection of Competition (CPC) to block the transaction and to merge the proceedings with an ongoing regulatory investigation on the acquisition of cable and satellite TV provider Bulsatcom, Yettel said in a statement e-mailed to the media on March 7.
The statement said that this had been done within the seven-day deadline for expressing an opinion given by the CPC to interested parties in the notification procedure by Slovenia Broadband, with United Group as the sole shareholder, for the acquisition of Bulsatcom’s key assets – its electronic communications network (mobile towers and fixed fibre network).
“Yettel Bulgaria’s request is that the notification procedure be merged with the investigation launched by the CPC to establish a possible breach of the Competition Act regarding the transaction leading to a change in control of Bulsatcom,” the statement said.
The statement said that Yettel Bulgaria was concerned that a series of acquisitions of economically and infrastructure strong companies by a major player in the telecommunications market will lead to the creation of a dominant undertaking with over 60 per cent in the TV distribution market and nearly 40 per cent in the internet access market.
“This in turn could also lead to a weakening of competitive pressure in the bundled services market (mobile, TV and internet) where one player will strengthen its leading position.”
The acquisition of Bulsatcom by Spas Rusev’s Viva Corporate Bulgaria was announced in August 2022.
In early December, media reports said that United Group, owner of mobile telecoms and cable TV provider Vivacom, had lent Viva Corporate 127 million euro to finance the Bulsatom deal.
According to the reports, apart from 37 million euro to be paid back to United Group through loans from commercial banks, United Group would receive Bulstacom assets the mobile stations and the optical fibre networks, with Bulsatcom immediately then leasing back the optical networks.
On December 22, the CPC said that it had opened an investigation into Viva Corporate’s acquisition of Bulsatcom following complaints from Yettel and A1 Bulgaria. The two companies are Vivacom’s main competitors on Bulgaria’s mobile telecommunications market.
Yettel asked the CPC to investigate whether there was a connection between Rusev’s businesses and Vivacom, and citing the loan and leaseback deal, said that those probably would enable United Group to influence decisions about Bulsatcom.
A1 asked the CPC for an assessment of the impact of the Bulsatcom acquisition on the market.
Bulsatcom chief executive Petar Rizov, in an interview published by 24 Chassa on March 6, said that all the steps of the transaction had been carried out in accordance with current Bulgarian and European legislation.
Rizov said that he was sure that the checks by the Bulgarian institutions would confirm the legality of the transaction.
“Even a first-year student knows that financing a business acquisition with debt is a standard business practice implemented in thousands of deals around the world. I am surprised by the absolutely baseless claims of some of our competitors that taking on debt for the purchase of Bulsatcom violates the legislation,” he said.
Selling part of the infrastructure to refinance debt is a completely normal practice worldwide, which has been adopted by big names in the telecommunications industry, Rizov said.
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