Shares of Vodafone (VOD) were rising early Wednesday afternoon following the European Commission’s conditional approval of the United Kingdom telecom company’s proposed $1.12 billion deal with London-based cable operator Liberty Global (LBTYA), Reuters reports.
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The pair said that the sale of Vodafone’s fixed-line business had already secured expressions of interest from a number of parties.
The new company will be a 50/50 joint venture between the two companies.
The Commission said that the merger of Vodafone Netherlands with Liberty Global-owned cable operator Ziggo, as originally notified, would have reduced competition in the markets for fixed multiple play services and for fixed-mobile multiple play services.
To address the Commission’s concerns, Vodafone offered to divest its retail consumer fixed line business in the Netherlands.
The combination would create a business with more than 5 million mobile subscribers, 4 million video clients and 3 million broadband customers. Vodafone uses KPN’s fixed network assets – copper and fibre – to provide fixed services to around 120,000 consumers, many of whom take triple-play services, it said.
The European Commission gave the go-ahead for Vodafone to merge with Ziggo, the Dutch branch of Liberty Global.
EU Competition Commissioner Margethe Vestager said telecoms were “of strategic importance for our digital society”.
“The commitments offered by Vodafone ensure that Dutch consumers will continue to enjoy competitive prices and good choice”, she added.
As such, the parties will now proceed with the sale process.
The Commission had concerns that the proposed transaction would have eliminated the benefits brought to the Dutch telecoms market by Vodafone’s recent entry.
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The EC also rejected an appeal by The Netherlands for the Dutch regulator to have the deal referred back to it.
