Banc Sabadell | The European Council has agreed to ask the European Commission to change the regulation on concentration in the TMT sector to facilitate mergers, which are necessary to boost innovation and investment in infrastructure. We note that the EC is in the process of approving the Digital Networks Act, although the draft disappointed the sector, as the measures envisaged to facilitate concentration are not forceful.
Assessment: This is positive news insofar as it is the governments of all EU countries themselves that are now pushing to facilitate concentration, and although the European Council has no legislative power, its requests or mandates are generally accepted by the EC when it comes to legislating.
Telefónica: Overweight (Closing price €3.371/share; Target price €4.90/share).
