Vodafone takeover bid for Nowo rejected by Portugal’s competition authority

 In Companies, Company takeovers, Mergers and Acquisitions, News, Telecoms

Portugal’s competition authority has definitively rejected a take-over bid by Vodafone to buy telecoms company Nowo.

“The Autoridade da Concorrência (AdC) has decided not to authorise the transaction because it considers that the merger operation would be susceptible to create significant blocks to effective competition in relevant telecommunications markets identified to the detriment of consumers”, states the AdC.

Vodafone has reacted by stating: “We have been notified by the Autoridade da Concorrência about the final decision that prohibits the acquisition of Nowo and are currently studying the grounds as to why”.

The AdC makes reference to a number of remedies communicated by Vodafone to allay the concerns outlined by the AdC; “specifically the sale to Digi of the rights to use the radio electric spectrum (DUER) reserved to new entrants acquired by Nowo regarding the recent auction to award frequencies”, as well as the “provision of a wholesale offer to Digi on the fibre optic network owned by Vodafone”.

However, the AdC, which is led by Nuno Cunha Rodrigues, says these remedies are not enough. The AdC considered that “the commitments, in their various variants, only allowed an effective response to the issue related to the worsening of barriers to entry resulting from the withdrawal from the market of the DUER originally reserved by Anacom for new entrants”.

The competition authority adds “the proposed remedies, on the one hand, presented risks of circumvention and distortion and, on the other hand, were not effective in their purpose, insofar as they would not allow to respond to the effects of the law.

In May, weeks after the initial decision to reject the acquisition, the Executive President of Vodafone Portugal, Luís Lopes said that there had been no “explanation” for the AdC’s opposition to buying Nowo, an operator that has less than a 2% market share. The decision, he said, was “bewildering”.