Altice has said it “does not agree” with a European Commission notice that the media and telecoms group may have ‘jumped the gun’ on approval of its purchase of Portugal Telecom by implementing the acquisition of the Portuguese telco before it had officially received a green light.
The EU’s merger regulation requires that acquiring companies notify transactions prior to their implementation and do not being to implement the deals before they are cleared by the Commission – a requirement known as the ‘standstill obligation’.
Altice notified the EC of its plans to acquire PT Portugal in February 2015 and received a conditional green light in April.
The EC has now taken the view that Altice actually implemented the acquisition prior to the adoption of the Commission’s clearance, and in some instances, prior to its notification.
In particular, the EC believes that the purchase agreement between the two companies put Altice in a position to exercise decisive influence over PT Portugal before notification or clearance of the transaction, and that “in certain instances” Altice exercised decisive influence over the telco.
The Commission has sent a ‘statement of objections’ to Altice pending the outcome of a full investigation.
Commissioner Margrethe Vestager, in charge of competition policy, said: “If companies jump the gun by implementing mergers prior to notification or clearance, they undermine the effective functioning of the EU merger control system. The Statement of Objections sent to Altice shows how seriously the Commission takes breaches of the rules designed to protect the merger control system.”
Altice strongly rejected the accusation that it had ‘jumped the gun’. “Altice does not agree with the European Commission’s preliminary conclusions, and will submit a full response to the statement of objections and contest all the objections. The sending of a statement of objections does not prejudge the final outcome of the investigation,” the company said.
If found guilty, Altice could ultimately face a large fine of potentially up to 10% of its total annual turnover.
This is not the first time the company has found itself in trouble over ‘jumping the gun’ on clearance of an acquisition. In November last year it received a €80 million fine from France’s domestic competition watchdog, the Autorité de la Concurrence, for doing the same at the time of its acquisition of SFR and Virgin Mobile France.
The regulator said that documents showed that Altice had exercised a controlling influence over both companies before it received regulatory permission to move forwards.
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21st February 2019