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EU clears Telenor acquisition by Apax

  • Friday, 24 August 2007 | News

The European Commission has given clearance for the $400 million acquisition of Telenor Satellite Services by private equity firm Apax Partners, stating it had reached the view that "the transaction would not significantly impede effective competition."

Both companies had been awaiting confirmation from the EU to proceed with the take-over plans, having announced the deal as far back as October 2006. Closure of the deal was contingent on regulators approving the move.

Apax's existing interests in satellite communications company Vizada (formerly France Telecom Mobile Satellite Communications) had created the necessity for an investigation into possible effects on competition, but EU regulators came to the conclusion that the deal would not be anti-competitive as there were sufficient alternative competitors in the market, since wholesalers can sell airtime from a number of different satellite operators.

"The Commission found that the merger would not raise competition concerns in this sector as alternatives for two-way communication services complying with regulatory requirements exist, such as HF (high frequency) and VHF (very high frequency) radio, and other market players are expected to emerge in the near future at both satellite operator and wholesaler level," it said, in a statement.

While the companies have not been able to comment so far as to how they will proceed with the acquisition transaction, it would seem quite likely that the Telenor Satellite Services business unit will be merged with what was France Telecom Mobile Satellite Communications, with the combined company going forward under the newly created brand Vizada.

With a combined share coming close to 40 per cent of the market for Inmarsat satellite airtime, and a greater scope for creating synergies and economies of scale, such a move could have a considerable impact on the maritime communications market.

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