EU opens in-depth foreign subsidies investigation into e&’s acquisition of parts of PPF Telecom

The European Commission (EC) said on June 11 that it has opened an in-depth investigation to assess, under the Foreign Subsidies Regulation (FSR), the acquisition by the Emirates Telecommunications Group Company PJSC (e&) of sole control of PPF Telecom Group B.V., excluding its Czech business.

“The Commission has preliminary concerns that e& may have been granted foreign subsidies that could distort the EU internal market,” the EC said.

The statement noted that e& is a State-controlled telecommunication operator based in the United Arab Emirates. PPF is a European telecommunication operator and a subsidiary of the PPF Group.

“The preliminary investigation indicates that there are sufficient indications that e& has received foreign subsidies distorting the EU internal market,” the statement said.

The alleged subsidies notably take the form of an unlimited guarantee from the UAE and a loan from UAE-controlled banks directly facilitating the transaction.

“Such subsidies are among the most likely to distort the internal market as set out in the Foreign Subsidies Regulation.

“The Commission has concerns that such subsidies may have improved e&’s capacity to perform the acquisition as well as the competitive position of the merged entity in the EU going forward, notably by improving its capacity to finance its EU activities at preferential terms.”

EC Executive Vice-President Margrethe Vestager in charge of competition policy said: “Today we open our first in-depth investigation into a concentration under the Foreign Subsidies Regulation – Emirates Telecommunications’ acquisition of parts of PPF Telecom.

“The FSR allows us to tackle distortive support from third countries for the acquisition of businesses in the EU. Our investigation will also assess whether e& may have received foreign subsidies that could distort fair competition in the telecom sector,” Vestager said.

As The Sofia Globe reported on August 2 2023, PPF Group and Emirates Telecommunication Group Company (“e&”) signed an agreement under which e& will acquire a stake of 50 per cent plus one share in PPF Telecom Group’s assets in Bulgaria, Hungary, Serbia and Slovakia, PPF said in a media statement on August 1.

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