The Competition Superintendence of El Salvador has acknowledged receipt of a new request for the acquisition of 100% of Digicel’s shares by Claro in March 2012.
Friday, July 20, 2012
From a communciation from the Superintendence of Competition (SC):
SC Receives new application from CLARO - DIGICEL
The Board (CD) of the Superintendencia de Competencia (SC), has received a new application for a new merger request made by the company America Movil, which owns the CLARO brand, for the purchase all of Digicel’s shares.
"The new application has been accepted for processing. We have 90 days to review its features and decide whether the merger will be authorized, permitted with conditions or denied", said Francisco Diaz Rodriguez.
The previous application was approved conditionally by the CD of the SC. The company did not accept the conditioning and decided not to continue with the process.
In March CLARO filed a new application, which has been accepted for processing after the company completed the necessary information.
The SC has a period of 90 days, ending on September 25, to perform the technical, economic and legal analysis which will allow them to decide whether to authorize, authorize with conditions or deny the economic concentration, as appropriate.
Regarding the conditions that the SC imposed on CLARO in 2011, when CLARO requested authorization to purchase Digicel, the Board (CD) of the SC decided to approve the merger subject to the fulfillment of conditions "ex ante" (previous) and "ex post "(post) designed to minimize the negative impact that the operation might have on competition in the mobile market and ensure the welfare of consumers.
After the competition regulator imposed the release of part of the spectrum leased by Claro as a condition to the merger between the two companies, America Movil has announced its withdrawal from the move.
In March last year, America Movil announced an agreement to acquire a 100% stake of Digicel El Salvador, for an undisclosed amount.
For the second time the Superintendence of Competition of El Salvador has refused permission for economic concentration between both companies.
From a statement from the Superintendency of Competition (SC):
SC does not authorize the purchase of DIGICEL
After carrying out technical legal and economic analysis, the Board of Directors (CD in Spanish) of the Superintendence for Competition (SC) decided to reject application of economic concentration by CLARO from the purchase of DIGICEL, considering that the proposed economic concentration has high probability of having an adverse effect on the dynamics of competition and consumer welfare in the markets for fixed and mobile telephony.
Claro has submitted a new request to the Superintendency of Competition (SC) in El Salvador for authorization to buy Digicel.
The SC has received a new request for authorization of economic concentration on the part of America Movil, owner of the Claro brand, to purchase all the shares belonging to Digicel.
Claro has asked the Superintendency to revoke its prior decision and "to consent without conditions to its consolidation operations."
The condition that Claro opposes, is the renouncement before the Superintendency of Electricity and Telecommunications (SIGET), of its right to operate 20 MHz of the total Salvadoran radio electric spectrum it has.
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