Eircom gets green light for the takeover of Meteor
THE Competition Authority has cleared Eircom's ?420m takeover of Meteor, the country's third mobile phone operator. Eircom's share price rose by 2.2pc yesterday, partly in expectation of the positive news.
Eircom is now expected to move quickly to complete the acquisition, possibly as early as next Wednesday. Eircom, which has around 75pc of Ireland's fixed-line sector, now returns to a fast-growing mobile phone market, after selling its mobile unit Eircell to Britain's Vodafone four years ago.
Eircom will now move quickly to use its sales and marketing force of 2,000 people to aggressively grow Meteor's market share, which currently stands at 12pc.
Meteor currently draws the vast majority of its customers from the pre-paid market. The company, which Eircom chairman Sir Anthony O'Reilly has dubbed "the Ryanair of the mobile sector", is now expected to target the bill-pay market.
As part of the Competition Authority clearance, Eircom has agreed to a number of conditions aimed at ensuring accounting transparency. Announcing that it was granting approval for the acquisition, the Competition Authority said it had "determined that the result of the proposed transaction will not be to substantially lessen competition".
Phil Nolan, chief executive of Eircom, said the clearance completes the reconstruction of the firm which has taken four years of work by the company's management and employees.
"I am delighted that we have now completed this strategically important transaction," he said.
The eight conditions applied by the Authority address its concerns about possible cross-subsidisation between the company's fixed-line and mobile businesses.
They require that both Eircom and Meteor provide telecoms watchdog ComReg with a number of financial statements.
Under the terms of the approval, Eircom must provide ComReg with specific accountancy statements for any future mobile phone entity established within the company if Eircom introduces an own-brand mobile product.
The conditions also require specific accountancy statements for Meteor, as well as details on the allocation of costs and internal transfers between Eircom's fixed-line business and Meteor and any new mobile entity established within the incumbent.
Finally, details on the allocation of costs and internal transfers between any new entity and Meteor are also required.
Shares in Eircom finished the day up 5c at ?2.26.