EU targets UAE telecoms firm in new anti-subsidy probe

EU targets UAE telecoms firm in new anti-subsidy probe

Telecoms group e& signed an agreement in August 2023 to purchase EU telecoms assets
Telecoms group e& signed an agreement in August 2023 to purchase EU telecoms assets. Photo: Josep LAGO / AFP/File
Source: AFP

The European Union on Monday announced a formal anti-subsidy probe targeting an Emirati telecoms company, the first action under new rules to focus on a foreign bid to buy EU assets.

Brussels has ramped up its scrutiny of foreign investment into the bloc in a bid to defend European industry, usually from rising threats from China and the United States.

The latest probe is the first against a non-Chinese company under new EU rules.

Telecoms group e&, whose majority stakeholder is the United Arab Emirates government, signed a 2.15-billion-euro ($2.3-billion) agreement in August 2023 to purchase Czech PPF telecoms group's assets in Bulgaria, Hungary, Serbia and Slovakia.

The European Commission said a preliminary probe "indicates that there are sufficient indications that e& has received foreign subsidies distorting the EU internal market".

Read also

Russian central bank chief calls for 'open economy'

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", it added.

PAY ATTENTION: Share your outstanding story with our editors! Please reach us through info@corp.legit.ng!

The commission said it will investigate whether the subsidies lead to "actual or potential negative effects" on the bid's process or the EU's internal market.

It will specifically look at whether the "support" allowed the UAE company "to deter or outbid other parties interested in the acquisition".

The probe was launched under new rules known as the Foreign Subsidies Regulation (FSR), which came into force last year and seek to prevent foreign subsidies from undermining fair competition in the EU.

"Today we open our first in-depth investigation into a concentration under the Foreign Subsidies Regulation, the EU's competition commissioner, Margrethe Vestager, said.

"The FSR allows us to tackle distortive support from third countries for the acquisition of businesses in the EU," she added in a statement.

Read also

Swiss renewable energy battle moves to the ballots

The commission has until October 15, 2024, to take a decision.

Brussels has already flexed its legal muscle with the new rules, forcing Chinese companies to withdraw from certain projects.

Chinese rail giant CRRC exited a tendered project in Bulgaria in March after the EU launched a probe into it over suspected subsidies.

And a similar investigation saw two Chinese-owned solar panel manufacturers withdraw from a public procurement tender in Romania last month.

Source: AFP

Authors:
AFP avatar

AFP AFP text, photo, graphic, audio or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP news material may not be stored in whole or in part in a computer or otherwise except for personal and non-commercial use. AFP will not be held liable for any delays, inaccuracies, errors or omissions in any AFP news material or in transmission or delivery of all or any part thereof or for any damages whatsoever. As a newswire service, AFP does not obtain releases from subjects, individuals, groups or entities contained in its photographs, videos, graphics or quoted in its texts. Further, no clearance is obtained from the owners of any trademarks or copyrighted materials whose marks and materials are included in AFP material. Therefore you will be solely responsible for obtaining any and all necessary releases from whatever individuals and/or entities necessary for any uses of AFP material.