AdC gives green light to Sonae’s takeover bid on PT with aggressive remedies

COLLAB distinguished with the APDC / Siemens Innovation Award

The Competition Authority gave the green light to Sonae’s takeover bid on PT by imposing a set of remedies that the company led by Paulo de Azevedo already considered aggressive.

The draft decision, which is now in the possession of the companies involved which have ten days to submit comments or proposals for making adjustments to the defined remedies, approves the merger of Optimus and TMN but obliges Sonae to facilitate the entry of a new mobile operator in the market.

This new operator inherits part of the network infrastructure left vacant by the mobile operator that disappears with the merger and will have to compete in the market with the new operator, with Vodafone and with virtual mobile operators whose figure is now referred to by AdC as another dynamic element of competition in this market, to whom Sonae will also have to facilitate access to the network.

Alongside this, Sonae is also obliged to give up one of the networks currently operated by Portugal Telecom: either the copper or cable network and in addition to this it will have to divest the content business. Sell ​​all cable channels of PTM, 50 percent of Sport TV and Lusomundo cinemas.

In the fixed area, Paulo Azevedo’s company will also have to proceed with the structural separation of the wholesale and retail businesses.

The deadlines for the disposal of one of the networks is not known (although it has been defined). Similar situations dealt with within the scope of the European Commission have adopted a period of 12 months to carry out the operation.

Sonae guarantees that the remedies imposed by the AdC are tougher than the proposals it presents, especially in the area of ​​furniture. «From the point of view of Sonaecom, the remedies are expensive, demanding and hard. It is necessary to see if they meet the terms of the offer», writes Público citing a source from the operator.

Among the measures imposed, Sonae will also have to return the FWA licenses it currently operates.

The Sonae takeover bid was launched around seven months ago and offers a consideration of 9.5 euros for each PT share, for a total of around 11 billion euros. Over the next ten days, Sonae will decide whether to keep the proposal, gathering reactions from the market, especially from the hard core of PT shareholders now led by Nuno Vasconcelos.

Related News:

2006-09-11 – PT launches copper-based multiplay offer next year

2006-02-07 – Sonae extends takeover bid to PT Multimédia2006-02-06 – Sonae SGPS launches takeover bid on Portugal Telecom