Brussels, Belgium — The European Commission gave the green light Tuesday for an Emirati group to acquire the assets of a Czech telecom operator — after it agreed not to use foreign subsidies to distort competition in the EU.
Emirates Telecommunications (e&), whose majority stakeholder is the United Arab Emirates government, signed a 2.15-billion-euro ($2.3-billion) agreement in August 2023 to purchase Czech PPF Telecoms group’s assets in Bulgaria, Hungary, Serbia and Slovakia.
The commission opened an investigation in June into the planned acquisition to determine in particular whether the e& bid was propped up by foreign subsidies.
Brussels has ramped up its scrutiny of outside investment into the bloc, and the probe was the first under new rules allowing it to crack down on unfair foreign subsidies.
It concluded that aid provided to e&, in the form of grants, loans and unlimited state guarantees “did not lead to actual or potential negative effects on competition,” a commission statement said.
However, it did find there was a risk the subsidies could lead to a distortion of competition in the EU internal market post-transaction, and secured a series of concessions as a result.
The Emirati group agreed to give up unlimited state guarantees, and not to finance PPF’s activities in the EU internal market — except for certain emergency funding with prior approval from Brussels.
It also agreed to notify the European Commission of any future acquisition, regardless of size.
“Today’s decision marks a positive outcome to these proceedings, thanks (to) the parties’ cooperation and willingness to offer a comprehensive set of remedies to address our concerns,” EU competition chief Margrethe Vestager said in the statement.
The e& probe was launched under new rules known as the Foreign Subsidies Regulation (FSR), which came into force last year and seek to prevent foreign subsidies from undermining fair competition in the EU.
Brussels had already flexed its legal muscle with the rules, forcing two Chinese-owned solar panel manufacturers to withdraw from a public procurement tender in Romania earlier this year.