Orange, Iliad, Bouygues' SFR deal faces French antitrust scrutiny

By Foo Yun Chee

BRUSSELS, July 15 (Reuters) - Orange, Iliad and Bouygues' €20.35 billion ($23.24 billion) joint bid for telecoms operator SFR will come under French antitrust scrutiny, the French regulator said on Wednesday, indicating a possibly easier regulatory path for the deal.

The telecoms industry has long complained about the European Commission's reluctance to approve deals reducing the number of operators in a market from four to three, amid concerns about price hikes and less competition.

It argues the Commission should take into account other non-price factors, such as investments.

The EU antitrust regulator said it had acceded to Iliad's request to refer the deal, one of the biggest European telecoms deals in recent years, to the French authority, confirming a Reuters exclusive.

"The Commission considered that the conditions for a full referral under Article 4(4) of the EUMR were met in this case, and thus referred the case to France," the EU executive said in a statement.

INVESTIGATION EXPECTED TO LAST AT LEAST 18 MONTHS

"The Commission considers the Competition Authority to be best placed to analyze the Iliad operation," the French regulator said in a separate statement, pointing to the impact of the deal on the domestic market and its experience.

It said the investigation is expected to last at least 18 months because of the complexity of the cases and the characteristics of the markets involved.

The Commission had jurisdiction to examine Iliad's role in the deal because the company's turnover meets the EU threshold. Orange and Bouygues do not meet those criteria, and automatically come under the French review.

A breakup of SFR would reduce the number of mobile operators in France to three. Providers said they need the scale to better compete with rivals and to allow leeway for investments.

Orange CEO Christel Heydemann has said the company may offer behavioural remedies to ease possible competition concerns.

($1 = 0.8757 euros)

(Reporting by Foo Yun Chee; Editing by Tomasz Janowski and Jan Harvey)