Telenor, TeliaSonera Drop Danish Merger Plans After Failing to Win EU Approval

The merger plan would have reduce the number of players in Denmark from its current four to three.

TeliaSonera and Telenor have ditched plans to merge their respective business units in Denmark after failing to win approval from European antitrust authorities.

The attempted merger is the first telecoms deal to be blocked under Margrethe Vestager, who has been European Union competition Commissioner for a year. “What the parties offered was not sufficient to avoid harm to competition in Danish mobile markets”.

Telenor and TeliaSonera are the second and third largest Danish operators and their combination would have taken them to number one. “To me it was necessary to have a fourth mobile operator”.

“What we were looking at were very serious concerns”.

Asked if she was preparing to block the deal, Vestager said: “We were on the road”. Every case has to be assessed on its own facts and merits.

Meanwhile, United Kingdom competition regulators are vetting a separate $20 billion deal whereby the country’s fixed line broadband market leader BT is set to acquire the biggest mobile network operator, EE, from Orange and Deutsche Telekom (Xetra: 555750 – news).

The statement from the EC seems to be “four good, three bad”, which it should now be expected to apply to other operator consolidation activity. As such, the EC laid out its objections to the deal in June. TeliaSonera and Telenor said they will continue now with their individual operations in Denmark, which are still fully up and running, while reviewing their strategic options in the Danish market.

Earlier reports suggested that the EU Commission had demanded that the two companies sell off 40 percent of their network to another player on the Danish market before a merger could be approved.

TeliaSonera’s chief financial officer Christian Luiga said the operator had come up with several proposals but could not go further as there would not have remained enough economic value for them.