22 Feb 2024 Cases

Orange and MásMóvil secure conditional approval for four-to-three Spanish mobile network Joint Venture

2 minute read


Compass Lexecon advised telecommunications providers Orange and MásMóvil during the European Commission’s review of their proposed Joint Venture in Spain. The European Commission cleared the €18.6 billion transaction in February 2024.

In July 2022, Orange and MásMóvil signed an agreement to combine their activities in Spain, through a Joint Venture that will be 50/50 owned and jointly controlled by both operators. Orange and MásMóvil are the second and fourth largest telecom operators in Spain, respectively. They are both active in the retail supply of fixed and mobile telecommunication services and multiple-play bundles. They also provide mobile and fixed telecommunication services to wholesale customers.

Compass Lexecon advised Orange and MásMóvil during the proceedings in front of the European Commission. Our role involved pre-notification advice to both parties and economic assistance throughout Phase I and Phase II of the proceedings.

The Commission expressed concerns over the elimination of an ‘innovative and significant rival’ and about the Transaction reducing the number of mobile network operators in the market from four to three. We assessed horizontal and vertical theories of harm for both fixed and mobile telecommunications, showing inter alia that the JV would continue to face a strong competitive constraint from other operators in the retail market as evidenced by an empirical analysis of recent pricing dynamics, and that the JV would not have the ability or incentive to foreclose mobile virtual network operators’ (MVNO) wholesale access to networks. We also supported the parties in submitting relevant evidence about network and non-network efficiencies arising from the merger.

The Commission dropped its vertical concerns in the course of the investigation, while conducting a thorough assessment of the horizontal impact of the transaction in retail markets, including an assessment and efficiencies. The European Commission gave its final approval in February 2024, subject to the Parties divesting mobile-spectrum licenses and granting an optional roaming agreement to Digi Communications, an MVNO in the Spanish market.

The Compass Lexecon team was led by David Sevy, Elena Zoido, Thilo Klein and Jorge Padilla and included Valérie Meunier, Soledad Pereiras, Scott Holbrook, Cecilia Nardini, Gwilhem Charbonnier, Oliver Maerz, Cindy Nah, Celia Ruiz Mejia, Carla Banfi, Lily Chang, Saffi Wu, Ziyue Yang, Andrea D’Amico, Nikki Hui, Sebastien Grotto, Janne-Matti P Kinnunen, Kuljeetsinh Nimbalkar, Claire Kraemer and Alina Rymar.

The CL team worked closely together with a team from Latham & Watkins (led by partners Jacques-Philippe Gunther, Carles Esteva Mosso, and Adrien Giraud) and a team from Gide Loyrette Nouel (led by partners Stéphane Hautbourg and Romain Rard), both advising Orange, as well as with a Freshfields Bruckhaus Deringer team (led by partners Thomas Wessely and Rikki Haria) and a team from Pérez Llorca (led by partners Juan Jiménez-Laiglesia and Pablo Figueroa), both counsel to MásMóvil.

A new version of Compass Lexecon is available.