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(Reuters) -Italy’s competition authority has opened an in-depth investigation to assess the acquisition of Vodafone Italia by Swisscom under Italian merger control rules, the Swiss telecoms company said on Thursday.
Swisscom agreed a deal in March to buy the Italian unit of Vodafone for 8 billion euros ($8.8 billion). It plans to merge the business with its existing Italian subsidiary Fastweb, in a move which would consolidate one of Europe’s most competitive telecoms market.
The tie-up will create Italy’s second-biggest fixed-line broadband operator behind Telecom Italia (TIM), with a strong presence in the prized business segment, and a leading player in mobile.
Swisscom said such kind of antitrust reviews “are not uncommon in the telecommunications sector” and that the company “remains convinced that the transaction is pro-competitive”.
It added it still expects the transaction to be completed in the first quarter of next year.
“We will continue to work closely and constructively with the Italian competition authority to secure a timely clearance,” Swisscom added in a statement.
Analysts sees limited risks for the deal to be blocked but flag the possibility of potential remedies involving the business sector, given Vodafone and Fastweb enjoy significant market shares.
“We do not see a material increase in the risk of deal failure,” Intesa Sanpaolo analyst Andrea Devita wrote in a daily report.
“At the same time, in case of negotiations over potential remedies the current deadline for closing the deal could be at risk”, he added.($1 = 0.9076 euros)
(Reporting by Mateusz Dobrzyniewski and Elvira Pollina, editing by Rachel More and Keith Weir)