(Adds European Commission, Telefonica Deutschland, KPN no
By Foo Yun Chee
BRUSSELS Feb 18 The European Union antitrust
regulator objects to Telefonica's proposed 8.6 billion
euro ($11.83 billion) bid for KPN's German unit in its
current form, two people familiar with the matter said on
The deal, which will reduce the number of mobile providers
in Europe's biggest market from four to three, is crucial for
the European telecoms industry, which is keen to build up scale
via consolidation and better compete with bigger U.S. peers.
The European Commission's objection to the deal as it stands
would likely lead to the offer of concessions from the German
unit of Spain's Telefonica.
The Commission, the EU's executive body, opened an in-depth
investigation into the deal in December last year, saying it was
concerned the takeover would reduce competition in Europe's
largest economy and lead to higher prices for consumers.
"The next step is a statement of objections to the
companies," said one of the people, referring to a Commission
document which sets out the regulator's demands in order for the
deal to be approved.
A third source said the Commission will likely send the
document to the companies next week.
Commission spokesman for competition policy, Antoine
Colombani, declined to comment. Telefonica Deutschland spokesman
Albert Fetsch and KPN also declined to comment.
Companies typically offer concessions to allay regulatory
Hutchison Whampoa secured EU approval two years
ago to buy Orange's Austrian unit after promising to
help new operators enter the market there.
(Additional reporting by Phil Blenkinsop, Edward Taylor in
Frankfurt and Jesus Aguado in Madrid; editing by John O'Donnell)