EU probes SFR's takeover bid for Tele2 unit

21 Mar 2007

(Associated Press via NewsEdge) EU regulators said they would investigate in detail plans by French mobile phone operator SFR to buy Tele2 AB's French fixed-line telephone and broadband unit, saying they believed the deal could shrink competition in the French pay-TV sector.

SFR is jointly controlled by French media conglomerate Vivendi and British telecom company Vodafone.

Vivendi also owns the leading French pay-TV network Canal Plus, and the European Commission said this led it to believe that the deal 'is likely to give rise to competition concerns' because it would combine two direct rivals as well as businesses involved in the same supply chain.

It set a deadline of Aug. 2 to decide whether to clear or block the deal.

Swedish telecom company Tele2 AB said in October it would sell its French fixed-line telephone and broadband unit to SFR for $450 million.

Regulators said their investigation has already shown that the deal could weaken other high-speed Internet operators who are the main rivals to Canal Plus and 'could therefore lead in due course to an increase in prices and a deterioration in the quality of supply.'

They also pointed to antitrust problems because Vivendi and SFR might have upstream control over distribution rights to pay TV and audiovisual content supplied to pay-TV channels.

The EU's executive arm rarely prevents deals going ahead but it can ask the companies to make sell-offs or binding promises to change how they do business.

© 2007 The Associated Press

© 2007 Dialog, a Thomson business. All rights reserved

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