The European Commission is set to grant conditional approval to the proposed $47 billion merger between Telia of Sweden and Norway's Telenor today after the two former telecommunications monopolies agreed to far-reaching divestments and market-opening measures.
The deal will create a telecoms power in the Nordic region to rival bigger operators in Germany, France and Britain which have become increasingly aggressive outside their home markets.
A Commission source said yesterday regulatory clearance was no longer in doubt, confirming the conviction expressed by Telia's CEO Mr Jan-Ake Kark last Sunday that the state-controlled companies and respective governments had now fully appeased the Commission's concerns about the merger.
Telia said last month it would sell its cable TV network, which it says is the second-largest in Europe with 1.3 million subscribers, removing the main stumbling block to EU approval.
Cable TV is a precious asset to rival traditional telecoms infrastructure for the provision of Internet and interactive services such as banking and tele-shopping.
As the incumbent telecoms operator in Sweden, Telia owns both.
More generally, the two partners have already announced they will sell overlapping businesses in their home countries as well as Denmark and Ireland.
Telenor has a one-third stake in Telenordia, a venture with British Telecommunications and Tele Danmark.
The merger partners also agreed to open access to the last mile of copper wires into consumers' homes in their respective countries, a process known as local-loop unbundling.
The Commission was all the more reluctant about giving its blessing because the two companies, besides being still dominant in their home markets, were already competing against each other because of the geographic proximity.
The companies plan to formally merge on November 1st, creating a yet-to-be-named group with expected 1999 turnover of 90 billion Swedish crowns ($11.04 billion).
It is scheduled for partial privatisation in early 2000.
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