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Is Italy Different From Denmark?

11 September 2015 by lberuti

This morning, TELNOR ( Telenor ) and TLIASS ( TeliaSnoera AB ) announced the withdrawal of the merger in Denmark of their mobile operations. The companies were not able to agree with the European Commission on acceptable conditions to go ahead with their plan to create a player with a 45% market share, in effect creating a 2 player market (TDC would have had a similar 45% market share and Hutchison the remaining 10%). This was taken as a sign of a tougher stance towards mobile consolidation from new commissioner Vestager going forward. Even though the latter said one “cannot draw conclusion from failed Denmark merger for Hutchison merger bid in UK and Italy” and despite Italy’s more competitive landscape, investors’ started to ask questions regarding the proposed association of Vimpelcom and Hutchison’s mobile assets in Italy. That was enough to send the 5 year risk premium of WIND 40bps wider at 290bps.