EC Approves e& - PPF Deal

The European Commission gave the green light to the proposed acquisition of parts of PPF Group’s telecoms assets by UAE-based e&. The deal, however, is subject to certain conditions offered to resolve competition concerns. E& is seeking to acquire a stake of 50% plus one share in PPF Telecom Group, covering assets in Bulgaria, Hungary, Serbia, and Slovakia. Operations in the Czech Republic are excluded from the deal.

The decision marks the conclusion of the EC’s first probe under the Foreign Subsidies Regulation (FSR) introduced in 2023 to rein in what would be deemed as unfair state support for overseas companies. It launched the in-depth investigation in June after a preliminary probe indicated e& and UAE sovereign wealth fund Emirates Investment Authority (EIA), which owns a 60% stake in the operator, received subsidies from the UAE which could distort the EU internal market. These included guarantees from the UAE and a loan from state-owned banks enabling the PPF acquisition.

Following the FSR probe, the EC decided foreign subsidies received by e& did not lead to actual or potential negative effects on competition in the acquisition process. “E& was the sole bidder for the target and had sufficient own resources to perform the acquisition,” the EC stated. To address remaining competition concerns, e&’s remedy package includes a pledge to remove an unlimited state guarantee, a prohibition of any financing from e& and EIA for PPF’s activities in the EU, and an agreement any financing for activities outside the EU would be subject to oversight by the EC.