Key Barrier to Telekom Slovenije Sale Removed

The Commission for Competition Protection said in Wednesday's statement that the merger between Telekom Slovenije's One and Telekom Austria's Vip subsidiaries can go ahead under the conditions submitted by the firms for the transaction.

Because the merged company will have a market share in excess of 50%, the companies have pledged in the segment of mobile telephony to safeguard competition by providing for the launch of a virtual network operator, which would provide services for at least 15 years.

Additionally, the merged company will have to keep current retail offers for mobile telephony unchanged until the full-fledged launch of the virtual mobile operator.

The measures are needed to prevent any distortions which may arise from the merger of the second- and third-largest mobile operators in Macedonia. The market share of Vip is assessed at around 28% and that of One at around 25%.

In the field of television services, Telekom Austria also committed itself to enabling access to "the technical distributional platform" for direct-to-home satellite TV to interested alternate providers, which would in turn be able to transmit PAY-TV services to the end user.

Responding to the decision, Telekom Slovenije said in a statement that the procedures related to the merger were scheduled to be completed in the final quarter of this year.

As part of the merger, Telekom Austria will obtain a 55% stake in the new, joint company, with Telekom Slovenije having the option of withdrawing completely from ownership within three years. Unofficial information puts Telekom's share at about EUR 100m provided the Slovenian telco withdraws within a year.

The decision is important for the privatisation of Telekom Slovenije at home, since the sale of a majority stake in the telco to UK fund Cinven was halted last month due to uncertainty over regulatory approval of the Macedonia transaction.

Cinven sought guarantees for the transaction in an amended offer it submitted just a day before the Slovenian Sovereign Holding (SSH) met for the final time to approve its previous offer.

This lead to a deadlock in the sale, as neither side was willing to back down over the issue- the SSH maintaining it would sell the 72.75% stake to Cinven under the conditions of its original offer and Cinven saying a deal was not possible without guarantees for the pending transaction in Macedonia.

The regulatory clearance from Macedonian authorities appears to have removed this barrier, although the transaction in Macedonia still needs to be formally completed.

Both SSH and Cinven had indicated last month that they were still interested in completing the privatisation of Telekom Slovenije.

SSH said today that it was waiting for official notification of the Macedonian decision, after which it would reach out to Cinven.

The STA is still waiting for comment on the decision from the UK fund.

Source: Slovenia Times