Competition authority rejects Vodafone bid for Nowo

 In Mergers and Acquisitions, News, Telecoms

Portugal’s monopolies and competition authority AdC has thrown out Vodafone’s bid for the Portuguese telecoms company Nowo.

According to Negócios, the rejection is down to commitments from the operator led by Luís Lopes and the so-called ‘Nowo effect’. Vodafone now has two options: come up with an alternative or drop the acquisition bid.
So far, the Autoridade da Concorrência (AdC), which threw out the bid on Wednesday, has refused to comment, but the ‘Nowo effect’ means that in all the Portuguese districts where Nowo has a presence, all of the other operators compete by offering lower prices which is good for the customer. In the opinion of the AdC, a buyout would give Nowo a competition value advantage greater than the company otherwise would have.
In December, Vodafone came up with ‘remedies’ or solutions to ensure that the buyout operation would not have a negative effect on competition; solutions such as access to its fibre optic network and offering to hand back the licence for the 5G spectrum acquired by Nowo from Anacom in the 5G auction held in 2021.
These ‘remedies’ included an agreement with Digi – a European experienced telecommunications service provider, with a history of almost 30 years in the industry, having operations in Romania, Spain and Italy – announced at the beginning of December.
But for the AdC these commitments do not resolve the so-called ‘Nowo effect’. If Nowo was bought up by Vodafone then competition would be reduced and consumers would ultimately lose out on a better deal with cheaper prices.