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EU lays out concerns about Orange, Jazztel deal - sources

The logos of Jazztel and Orange are pictured in Madrid, September 16, 2014. REUTERS/Andrea Comas

By Foo Yun Chee, Andres Gonzalez and Julien Toyer

BRUSSELS/MADRID (Reuters) - EU antitrust regulators have warned Orange that its bid for Jazztel may hurt competition, sources said, putting pressure on the French telecoms provider to offer concessions or see the 3.4-billion-euro (2.46 billion pounds) deal quashed.

The European Commission opened an in-depth probe into the deal in December last year, worried that the buyout would reduce competition for fixed Internet access and fixed-mobile multiple play offers in Spain and result in higher prices.

The European Union executive sent a statement of objections to the companies earlier this week, said three people with knowledge of the matter, declining to provide details on the content of the document.

Such documents typically spell out why the regulator sees proposed mergers as a significant impediment to competition unless offset by concessions.

An attempt by Orange to allay regulatory worries in the EU's preliminary review was rejected as insufficient. The Commission will decide on the deal by April 30.

Commission spokesman Ricardo Cardoso, Jazztel and Orange declined to comment.

The companies are confident of gaining regulatory approval with minor concessions, the sources said.

The deal is crucial for Orange in order to overtake Vodafone which bulked up last year by acquiring Spanish cable operator Ono, in the Spanish mobile market.

Jazztel would add 1.5 million broadband subscribers to Orange and help it match competitors' fixed, TV and wireless packages.

(Reporting by Foo Yun Chee, Andres Gonzalez and Julien Toyer; Editing by Paul Day and Elaine Hardcastle)