Germany Seeks to Probe E-Plus Deal in Tug of War With EU

Germany’s antitrust regulator sought the right to probe Telefonica SA (TEF)’s purchase of Royal KPN NV (KPN)’s E-Plus unit, setting up a possible tug of war with the European Union over who reviews the deal.

The Federal Cartel Office today lodged the request at the Brussels-based European Commission with the backing of the government, Andreas Mundt, the authority’s president, said in an e-mailed statement.

“The merger has effects exclusively on the German mobile-phone market,” said Mundt. “So a referral would be the right way.” The commission has 35 working days from the initial notification at the end of last month to adopt a referral decision or deal with the case itself, the cartel office said.

The 8.55 billion-euro ($11.6 billion) sale, which will merge the two companies’ German units, is one of two deals that may transform the country’s telecommunications industry once dominated by Deutsche Telekom AG. EU regulators have already given the go ahead to Vodafone Group Plc (VOD)’s bid for Kabel Deutschland Holding AG. (KD8)

EU Competition Commissioner Joaquin Almunia said on Sept. 13 the deal should be handled by his unit, not by the Germans. The Bonn-based Cartel Office is concerned that the transaction would reduce the number of mobile-phone providers in the country from four to three.

Antoine Colombani, Almunia’s spokesman, said by e-mail that the commission received the German request and would examine it.

To contact the reporters on this story: Karin Matussek in Berlin at kmatussek@bloomberg.net; Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

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