Financial Times
February 5, 2012
Vodafone is set to abandon attempts to merge its Greek business with rival Wind Hellas in the face of concerns among regulators about the precedent being set by allowing a duopoly in a European mobile market.
Vodafone’s Greek subsidiary and Wind Hellas had announced plans in September to pursue a merger to create a more competitive position in the difficult economic conditions in the country. Vodafone is the second-largest operator in Greece, ahead of Wind, but both are about half the size of Cosmote, the state-backed market leader. Vodafone took a £450m impairment loss on its Greek unit last quarter.
As recently as last week reports had suggested that a deal might be struck, with Vodafone expected to have received a 60 per cent ownership and Wind’s shareholders lined up for the remaining 40 per cent. The combined group would have been valued at more than €1bn.
However, one person with knowledge of the talks said that the likelihood of being able to agree a deal that was satisfactory for European regulators had diminished since Christmas.
He added that the argument of difficult market conditions was unlikely to be acceptable under competition rules. Even combined, the two would not be larger than Cosmote, although they could have close to 50 per cent of the market with about 4m subscribers in Greece each.
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