The European Commission could issue an initial ruling on the hostile takeover of Mannesmann AG by Vodafone AirTouch PLC by February 17, the Commission announced om Wednesday.
The Commission seeks to clarify the regulatory situation in the European Union (EU) as it relates to the takeover bid, the Commission said in a statement .
The Commission revealed that Vodafone AirTouch had formally notified the EU regulatory body of the planned takeover on January 14. Vodafone AirTouch's intentions of hostile take over of Mannesman were made public by the German telecom carrier last November.
Under EU rules, the Commission's merger task force has an initial four weeks to investigate market conditions to determine whether the operation is compatible with EU law, notably as regards to the prohibition against creating or reinforcing a dominant position.
If the Commission determines that the takeover does raise competition concerns, it has another four months in which to reach a final decision to block, approve or require significant changes in the structure of the notified takeover.
The Commission is already concerned of the risk that the merger will eliminate competition in several markets, notably in the UK where Mannesmann recently acquired the wireless operator Orange and where Vodafone AirTouch is the biggest mobile operator, the Commission said. Orange is currently ranked the third largest wireless operator in the UK.
Except in the case of Orange, where it was already clear that the transaction would lead to significant competitive overlap, the Commission would not be able to form a view as to whether the takeover was compatible with the common market until it had completed its market investigation, the Commission said.
In view of this concern, if during the initial four week period, Vodafone agrees to spin Orange off from the merger, the Commission has another two weeks to examine the implications of this undertaking. Vodafone launched its hostile bid for Mannesmann in November 1999 for over $US100 billion. Mannesmann has continued to resist the bid.