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Serbia: Telecom’s Acquisition Goes Into Phase II

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The Serbian NCA, the Commission for Protection of Competition, has announced it has opened a Phase II investigation of a planned acquisition of a local cable operator by the Serbian telecom incumbent – Telecom Serbia.

What is the transaction about?

The target in the transaction is a Serbian company Telemark Systems. The company is a cable operator in the Serbian town of Čačak. Apart from cable TV, its services also include internet and fixed telephony.

Information published so far is scarce and all we know about the transaction is that it has been structured as a share deal.

What are the next steps in the NCA’s investigation?

Following the opening of a Phase II investigation, the NCA has four months to decide whether it will clear the notified transaction. This means that we can expect a decision by the end of June at the latest.

There are three possible outcomes of the Phase II: the NCA may clear the transaction unconditionally, clear it with strings attached, or prohibit it. Prohibition seems the least likely outcome, as the NCA does that only exceptionally.

If the investigation would indicate certain anticompetitive effects of the planned transaction, the NCA would issue a statement of objections. Upon receiving such statement, Telecom would be able to offer commitments aimed at alleviating the concerns identified by the NCA.

How often does a merger examination in Serbia go into Phase II?

This happens rarely – for instance, during 2018, out of approximately 150 mergers examined by the NCA, only one went into a Phase II. In the end, that merger was cleared conditionally, based on the parties’ commitments.

Can interested parties comment on the ongoing investigation?

Yes. In the published decision on the opening of the Phase II, the NCA invited all interested parties to provide their comments with respect to the planned transaction. Comments can be sent by mail to the NCA’s seat in Belgrade.

The NCA did not provide a specific deadline within which comments should be provided, noting only that this should be done ‘without delay’.