The European Commission has opened an in-depth investigation into Vodafone’s (LON:VOD) acquisition of Liberty Global assets, the regulator has said. The news comes after it emerged earlier this month that the takeover was likely to undergo a full-scale EU probe.
Vodafone’s share price has slipped into the red in today’s session, having given up 0.34 percent to 161.95p of 08:58 GMT. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index having climbed into positive territory and currently standing 0.41 percent higher at 6,834.95 points. The group’s shares have lost more than 30 percent of their value over the past year, as compared with a near nine-percent fall in the Footsie.
EU opens in-depth probe
The European Commission announced in a statement yesterday that it had opened an in-depth investigation to assess Vodafone’s proposed acquisition of Liberty Global’s business in Czechia, Germany, Hungary and Romania, since it was concerned that the tie-up might reduce competition in Germany and Czechia. The regulator said that it will make a decision until May 2.
“Our in-depth investigation aims to ensure that Vodafone's acquisition of Liberty Global’s telecommunications businesses in Czechia, Germany, Hungary and Romania will not lead to higher prices, less choice and reduced innovation in telecoms and TV services for consumers,” Commissioner Margrethe Vestager, in charge of competition policy, commented in the statement.
Reuters noted in its coverage of the news that Vodafone had said that it still expected EU approval by mid-2019.
“On balance, we conclude based on the language in the press release that this transaction remains on track for a Phase II approval and closing,” Bernstein wrote in client note, as quoted by Reuters.
Analysts on Vodafone
Sanford C. Bernstein, which rates Vodafone as a ‘buy,’ set a price target of 235p on the shares today. According to MarketBeat, the blue-chip group currently has a consensus ‘buy’ rating and an average price target of 216.30p.