CGATES WITHDRAWS MERGER NOTIFICATION AFTER PRELIMINARY CONCLUSIONS OF KONKURENCIJOS TARYBA

Konkurencijos taryba closed the examination of the merger notification regarding the acquisition of 100 per cent of SPLIUS shares and sole control by Cgates.

On January 24 Konkurencijos taryba received a merger notification from Cgates regarding the acquisition of 100 per cent shares of SPLIUS. Both undertakings provide fixed Internet access services, as well as paid television services and fixed telephony services in various cities and districts of the country.

On June 6 the merging parties received from Konkurencijos taryba preliminary conclusions stating that the intended merger would lead to a significant restriction of competition in the relevant retail market of paid television retransmission services in Šiauliai and in the relevant market of retail Internet access by fixed line connection technologies in the same city.

The analysis of market shares of the merging companies, as well as the evaluation of pricing and whether the merging firms are close competitors showed that after the merger Cgates would be able to increase the price of its paid television and Internet access services to consumers in Šiauliai as one of the lowest-price operators in the market would cease to exist and the company would face lower competitive pressure.

Following the preliminary conclusions, Cgates proposed commitments to Konkurencijos taryba, however, on July 5, before reaching an agreement on commitments, the authority received a request to close the examination of merger notification because Cgates had abandoned its plans to implement the transaction.