The French Conseil d’Etat Upholds The FCA Decision Approving The Buyer Proposed By Cellnex For Assets It Had Committed To Divest As Part Of Its Hivory Acquisition

By Anita Magraner Oliver, Thomas Verheyden & Tristan Favaletto on April 17, 2025

On April 17, 2025, further to an appeal lodged by a competitor (Valocîme), the Conseil d’Etat upheld the French Competition Authority (“FCA”) decision[1] approving Phoenix Tower International (“PTI”) as purchaser of the passive mobile infrastructure assets which Cellnex had committed to divest as part of the FCA’s review of its acquisition of Hivory.[2] The Conseil d’Etat approved the FCA’s analysis of the independence of the proposed purchaser as well as the absence of new adverse competitive effects due to the purchaser’s acquisition of the divested assets.

Background

In August 2021, Spanish telecoms group Cellnex notified the FCA of its intention to acquire Hivory, a French passive mobile telecoms infrastructure operator. Passive mobile infrastructure comprises the pylons on which “active” telecom operators install their antennas and the technical rooms and equipment needed to operate the antennas.

Cellnex and Hivory respectively operate around 9,000 and 10,500 passive telecoms infrastructure sites in France.

The FCA Decisions

The FCA identified potential competition concerns during its Phase 1 review of the transaction on the markets for the hosting of mobile telecoms equipment in urban areas (on rooftops and on “other sites”[3]).[4] Elevated sites suitable for passive telecoms infrastructure (e.g., water towers, electricity pylons) are rare, especially in large cities. Cellnex and Hivory are the two largest operators in France, and entry barriers are high.[5]

To address these concerns, Cellnex committed to divest 2,904 rooftop sites and 322 other sites located in urban areas to one or more operators approved by the FCA (as a so-called “upfront buyer”). The FCA cleared the transaction on this basis on October 25, 2021.[6]

On October 7, 2022, the FCA approved PTI, a US-based operator of passive telecoms infrastructure, as the purchaser of the divested assets. The divestitures involved the transfer of (i) 1,226 sites to a subsidiary of PTI, and (ii) 2,000 sites to Phoenix France Infrastructures 2 (“PFI 2”), a subsidiary of Phoenix France Infrastructures 1 (“PFI 1”), a company jointly owned by PTI and Bouygues Telecom. The FCA considered that PTI controls PFI 2 exclusively because the governance agreements for PFI 2 establish that Bouygues Telecom will not exercise any legal or de facto control and contain provisions preventing it from being involved in PFI 2’s commercial activities.[7]

In approving PTI as a suitable buyer, the FCA verified that PTI was an independent buyer, with no significant commercial or legal ties to Cellnex.[8] In addition, it conducted a competitive assessment of PTI’s acquisition of the divested assets. It found that PTI, through PFI 2, only operated in rural and suburban areas in France, not urban areas,[9] excluding any horizontal concerns. The FCA also assessed the risk of input foreclosure, i.e. the possibility that PTI might stop hosting competitors’ equipment or offer them lower-quality services after the merger. It ruled out this risk despite Bouygues Telecom being a shareholder in PFI 1, mainly because PTI fully controls PFI 2. PFI 1’s shareholders would have no reason to give up PFI 2’s revenue, especially in a market where customers can easily switch to other providers. The FCA found that Bouygues Telecom would have neither the ability nor the incentive to harm competitors through PFI 2.[10] By approving PTI’s takeover the sites, the FCA allowed Cellnex to complete its acquisition of Hivory, since the takeover of these sites was a condition of the FCA’s approval of the transaction.[11]

**The Conseil d’Etat’s ruling**

In December 2022, Valocîme, a French passive infrastructure competitor of Cellnex, challenged the FCA’s decision approving PTI as a suitable remedy taker before the French Conseil d’Etat.[12]

Valocîme applied for interim relief to suspend the FCA’s decision. The Conseil d’Etat rejected its request in December 2022, finding that Valocîme had not demonstrated the urgency required to suspend the decision.[13]

In its April 2025 judgment, the Conseil d’Etat rejected Valocîme’s claims on the merits and upheld the FCA’s approval of PTI as a remedy taker.

Independence of the remedy taker. Valocîme argued that PTI did not offer full guarantees of legal and commercial independence from Cellnex, because PTI and Cellnex were somewhat linked through their mutual dependence on Bouygues Telecom. Bouygues Telecom and Cellnex were each other’s main customer and supplier, and they were partners through two joint ventures in the relevant markets. The Conseil d’Etat ruled that these facts alone did not prove dependence between Cellnex and Bouygues Telecom. the Conseil d’Etat found that the argument based on the fact that, given the links between Cellnex and Bouygues Telecom, PTI and Cellnex are not genuine competitors could therefore be fully dismissed without the need to analyze a possible dependence of PTI or PFI 2 on Bouygues Telecom.[14] The Conseil d’Etat came to this conclusion on the basis that (i) their common joint ventures were not essential to their respective growth,[15] (ii) there was no capital or legal link between Cellnex and PTI or PFI 2, and (iii) the transfer of sites would reduce commercial links between the two undertakings because the share of Bouygues Telecom equipment hosted by Cellnex would decrease.
Market definition. The Conseil d’Etat confirmed the FCA’s definition of the relevant markets as covering metropolitan France, rejecting Valocîme’s argument that the analysis should have been conducted at a narrower, more local, level and take into account overseas territories.[16]
Input foreclosure. The Conseil d’Etat dismissed the risk of input foreclosure by Bouygues Telecom, holding that even if Bouygues Telecom were to control PFI 2, which the FCA had found not to be the case, the commercial agreements between PTI and Bouygues Telecom firewalled Bouygues Telecom from PTI and prevented Bouygues Telecom from interfering in PFI 2’s operations.[17]
Horizontal concerns. Finally, the Conseil d’Etat held that the PTI’s acquisition of the divested assets did not raise horizontal concerns because PTI was not active in the relevant markets before the asset transfer. It also dismissed Valocîme’s argument that the transfer would deteriorate the competitive situation on the market, noting that the transaction would result in the presence on the relevant markets of as many relevant operators (i.e. four) with market shares not exceeding those of each of the four previous operators.[18]

The Conseil d’Etat dismissed all Valocîme’s claims and upheld the FCA’s reasoning. The ruling provides, in particular, a practical analysis of the independence of a buyer in a complex market structure, with multiple interconnections. The Conseil d’Etat confirmed that a remedy buyer’s independence should be assessed with nuance, examining legal and capital links as well as the impact of the transaction on commercial interdependence, rather than merely focusing on the existence of business relationships.

[1] FCA, October 7, 2022, decision n°22-DCC-176 (the “FCA decision”), available here.

[2] Conseil d’Etat, April 17, 2025, No 469494 and No 470329, (the “Conseil d’Etat ruling”) available here.

[3] “Other sites” are sites that were not originally designed to accommodate passive infrastructure and may require investment and specific development to adapt the site to the needs of operators; Ibid, para. 17.

[4] FCA, October 25, 2021, decision n°21-DCC-197, available here.

[5] Ibid, para. 36.

[6] Ibid, paras. 73-75.

[7] FCA decision, paras. 3-5.

[8] FCA decision, para. 5.

[9] FCA decision, para. 18.

[10] FCA decision, paras. 20-24.

[11] FCA, October 25, 2021, decision n°21-DCC-197, paras. 85-86, available here.

[12] Appeals against FCA decisions to authorize (or prohibit) mergers fall within the exclusive jurisdiction of the Conseil d’Etat. See, article R. 311-1, 4° of the Code de justice administrative, available here.

[13] Conseil d’Etat, December 20, 2022, No 469498, available here.

[14] Conseil d’Etat ruling, para. 8.

[15] Ibid, the Conseil d’Etat found that it has not been established or even alleged that these joint ventures are essential to the development of Cellnex or Bouygues Telecom.

[16] Ibid, para. 9.

[17] Ibid, para 10.

[18] Ibid, paras. 11-14.