The European Commission (EC) has provisionally approved UAE-based e&'s acquisition of European telco PPF Telecom.

Approval of the deal follows an investigation into the acquisition, which is set to see e& (formerly Etisalat) acquire sole control of PPF Telecom, bar its business in Czechia.

The investigation into the deal focused on the Foreign Subsidies Regulation (FSR), which was based on initial concerns that e& could receive foreign subsidies that could distort the EU internal market.

Netherlands-based PPF is a telecommunications provider in Czechia, Bulgaria, Hungary, Serbia (Yettel), and Slovakia (O2). In total, the company serves more than 10 million customers.

e& is led by a sovereign wealth fund called the Emirates Investment Authority (EIA).

The Commission explained that an unlimited guarantee of subsidies could have meant an uneven playing field for the merged entity, when it comes to investing in its network, such as in spectrum auctions or the deployment of infrastructure.

However, the EC noted that e& and the EIA have agreed to commitments to prevent gaining an unfair advantage.

Included in this, is that e&'s "articles of association do not deviate from ordinary UAE bankruptcy law."

There is also a prohibition of any financing from the EIA and e& to PPF's activities in the EU internal market, plus a requirement for the carrier to inform the EC of future acquisitions.

The investigation by the EC was the first of its kind since the Commission introduced regulations for the economic bloc in July 2023, aimed to prevent market distortion that provides an unfair advantage to companies over other businesses operating in the region.

"Today we adopt our first final decision under the Foreign Subsidies Regulation. We found that e& benefited from subsidies from the United Arab Emirates that would give the merged entity an unfair advantage and could distort fair competition in the telecom sector," said Margrethe Vestager, Executive Vice-President in charge of competition policy.

"Today’s decision marks a positive outcome to these proceedings, thanks the parties’ cooperation and willingness to offer a comprehensive set of remedies to address our concerns.

e& has slowly built a presence in Europe, growing its stake in Vodafone Group to 15 percent earlier this month. The company has also been linked with a potential acquisition of eastern European carrier United Group BV.

Separately this week, the EU approved Swisscom's planned €8 billion ($8.92bn) acquisition of Vodafone in Italy.