(Picture: Getty Images)
Annual Assembly Ratifies Appointments by Fintech and CVH
Telefónica held its annual ordinary assembly yesterday, where the 2024 balance sheet was approved, and the new authorities appointed by Fintech (David Martínez) and CVH (shareholders of Grupo Clarín) were ratified. This occurred despite the Argentine government’s suspension of the effects of the sale of Telefónica’s local subsidiary to Telecom. The confirmed leadership includes CEO Gabriel Speratti, and directors Pablo Esses (president), Sergio Daniel Fichera, Claudio Alejandro Ukaski, and Juan Facundo Genis.
Regulatory Order Against Integration
Additionally, it was reported that the National Commission for the Defense of Competition (CNDC) issued a resolution ordering Telecom to abstain from “carrying out any type of legal, corporate, and/or commercial act that directly or indirectly implies integration or consolidation with Telefónica, including any initiative that involves unifying or integrating the teams that are part of Telefónica with Telecom, as well as any exchange of competitively sensitive information with Telefónica.”
Telecom Asserts Independence
Despite this, Telecom’s attorney, Andrea Cerdán, sent a note to the National Securities Commission (CNV) on Monday stating that, even before the resolution was issued, Telecom Argentina and Telefónica Móviles were operating as independent companies and businesses, and that both the board members and management of the latter were independent.
New Authorities Reflect Shareholder Representation
While Speratti and the four directors joined the company days after the purchase was made, the resolution does not address the composition of the boards. “The issue of the board is quite logical, as it represents the shareholders. The previous directors represented Telefónica (of Spain), which was the shareholder. What they cannot do is integrate or unify teams,” explained specialist Enrique Carrier.
In this regard, he clarified that the CNDC essentially does not want them to act as a merged company: while they are two different companies, they cannot operate as a single firm. “One thing is that both have the same owner (which is what is happening now), and another is that they operate as a single firm. For this reason, the CNDC must appoint an independent monitoring agent as the resolution dictates,” he added.
Government Suspends Sale Over Competition Concerns
On Friday, the government issued a statement informing that it had issued a preventive measure suspending the effects of Telecom’s purchase of Telefónica. “The measure is based on the recommendation of the National Commission for the Defense of Competition, given that the merger of both companies would significantly increase their market share,” the statement said.
Through the Secretary of Industry and Commerce, which reports to the Ministry of Economy, the government based its decision on the fact that the purchase operation, anticipated at the end of February, “would imply a concentration of 61% for the mobile telephony market, 69% for fixed telephony, and, regarding the residential internet service, in some areas of the country the concentration could reach 80%.”
The Ministry of Economy, headed by Luis Caputo, emphasized the importance of respecting “the applicable regulations” and “international standards.”
“Based on the recommendation made by the National Commission for the Defense of Competition, the decision has been made to safeguard the transparency and free competition of the market through the preventive measure until a deeper analysis of the notified operation is carried out,” the government stated. It added that it is fulfilling its “obligation to guarantee the rights of users and consumers, as well as to defend competition against all forms of market distortion.”
Resumo em Português:
Apesar da suspensão governamental da venda da Telefónica para a Telecom na Argentina, a Telefónica realizou sua assembleia anual e ratificou as novas autoridades designadas pela Fintech e CVH, incluindo o CEO Gabriel Speratti. A Comissão Nacional de Defesa da Concorrência (CNDC) ordenou que a Telecom se abstenha de qualquer ato que implique integração com a Telefónica. A Telecom afirmou que operavam independentemente mesmo antes da resolução. O governo suspendeu a venda por preocupações sobre a alta concentração de mercado em telefonia móvel, fixa e internet residencial. A venda da filial argentina da Telefónica para a Telecom por US$ 1245 milhões havia sido anunciada anteriormente como parte da estratégia da Telefónica de reduzir sua exposição na Hispano-América.
Resumen en Español:
Pese a la suspensión gubernamental de la venta de su filial argentina a Telecom, Telefónica celebró su asamblea anual ratificando a las nuevas autoridades designadas por Fintech y CVH, incluyendo al CEO Gabriel Speratti. La Comisión Nacional de Defensa de la Competencia (CNDC) ordenó a Telecom evitar cualquier acción de integración con Telefónica. El gobierno fundamentó la suspensión de la venta en la elevada concentración de mercado que implicaría la operación en telefonía móvil, fija e internet. La venta, anunciada por US$ 1245 millones, formaba parte de la estrategia de Telefónica de reducir su presencia en Hispanoamérica.
