Orange and MasMovil are set to get an EU antitrust warning about their 18.6-billion euro ($20.3 billion) merger in Spain, Reuters news report said.
Orange, the second largest telecoms provider in Spain, and fourth-ranked MasMovil announced the deal in July 2022, seen by the sector and analysts as a test case of whether the European Commission will ease its tough line on mergers that reduce the number of big telecom operators in a market to three from four.
The EU competition enforcer will set out its concerns about the deal in a statement of objections in the coming days, warning that the deal may be anti-competitive.
Orange and MasMovil are not expected to offer any remedies prior to receiving the document. Orange and MasMovil are forming a 50-50 joint venture as part of the consolidation. The transaction is based on an enterprise value of €18.6 billion, €7.8 billion for Orange Spain and €10.9 billion for MasMovil.
The Commission is scheduled to decide on the deal by Sept. 4.
The companies have argued that Spain is a very competitive market, citing Telefonica, Vodafone and numerous mobile virtual network operators (MVNO) which sell their services using the network of larger mobile operators.