UAE telecoms group e&’s (EAND.AD), opens new tab bid for parts of Czech telecoms company PPF’s assets will be investigated on concerns it may be benefiting from distortive foreign subsidies, EU competition regulators said on Monday.
The deal would see e&, formerly called Etisalat, acquire sole control of PPF Telecom excluding its Czech business.
The examination of the acquisition is the first by the European Commission under the bloc’s Foreign Subsidies Regulation which allows the watchdog to crack down on unfair foreign state support to their companies.
It said a preliminary investigation showed that there are sufficient indications that e& has received foreign subsidies which distort the EU internal market.
“The alleged subsidies notably take the form of an unlimited guarantee from the UAE and a loan from UAE-controlled banks directly facilitating the transaction,” the EU executive, which acts as the bloc’s antitrust enforcer, said in a statement.
“Such subsidies may have improved e&’s capacity to perform the acquisition as well as the competitive position of the merged entity in the EU going forward, notably by improving its capacity to finance its EU activities at preferential terms.”
The company said it was cooperating with the Commission.
“e& continues to be in constructive discussions with the European Commission on its proposed acquisition of a majority stake in PPF Telecom Group and is working cooperatively towards a conclusion of the authority’s review,” the company said in an email.
In a bourse filing on Tuesday, e& also said “it remains fully committed to the transaction with a view to closing it before year-end.”
The Commission set an Oct. 15 deadline for its decision which could include clearing the deal if concessions are offered or blocking it.
PPF, which is controlled by the wife of billionaire founder Petr Kellner who died in 2022, has investments in financial services, telecoms, media, mechanical engineering and biotech.
