No merger in Denmark for TeliaSonera and Telenor

TeliaSonera and Telenor announced today that the proposed merger of our respective business units in Denmark will not take place. Both companies have not been able to agree with the European Commission on acceptable conditions to go ahead with our plan to create a robust mobile operator. This means that Telia Denmark will now take up the task to form a future local Telia operation in Denmark.

In December last year, TeliaSonera and Telenor reached an agreement to merge their Danish operations. The new joint venture would have created a mobile operator that would be able to increase investments in networks and technology, to the benefit of the Danish customers.

“Since the beginning, we have been strong advocates of the need to increase investment levels in Denmark. In our view, creating a market player with the scale and ability to compete and invest would ensure that customers and businesses would benefit from better quality, speed and coverage,” says Robert Andersson, EVP and Head of Region Europe in TeliaSonera.

However, the merger discussions have now reached a point where it is no longer possible to gain approval for the contemplated transaction

In today’s pressrealse there  was also a quote from Telenor saying, 

“In the interests of both companies, we felt it necessary to act decisively . TeliaSonera and Telenor will continue to compete and deliver products and services in the Danish market through our respective original, and still fully up-and-running Danish operations,” says Kjell Morten Johnsen, EVP and Head of Telenor Region Europe.

Sören Abildgaard and current management team will now take the lead to form the future Telia Denmark.

Madeleine Stenberg, Group Communications

Some answers to expected questions:

Why will the merger not take place? In short, the merger discussions have reached a point where the conditions to meet the expectations of the European Commission and to gain approval are too great. The remedies we have offered would not meet the expectations of the Commission and if we went any further, the rationale behind the merger would not make sense.

Are you disappointed in the European Commission? The Commission has a process to follow and we respect that. But, of course we are disappointed with the outcome. We have said a number of times that we had a strong belief in this deal; we were fully committed to creating a robust and highly competitive new operator in the Danish market.

Do you see this as change of policy from the Commission when it comes to consolidation in the telecoms market? What is clear is that the Commission assesses each merger given the specificities of the each market. The assessment of the Danish market was that competition concerns existed in the retail, wholesale and business markets, we of course disagreed with that. Whether it is a change in policy is a question for the Commission or not remains to be seen based on how they treat further upcoming merger cases.

Do Telenor have the same view on this as us? Both companies sent today’s release, so yes we have the same view on this. And Telenor’s market position In Denmark is something you must talk to Telenor about