(Bloomberg) -- Abu Dhabi’s Emirates Telecommunications Group Co PJSC €2.2 billion ($2.4 billion) acquisition of PPF Telecom Group assets faces the first in-depth merger probe under the European Union’s tough new foreign-subsidy rules.

The European Commission said Monday that it has “sufficient indications” Emirates Telecom — also known as e& — has received state subsidies that could harm fair competition in the 27-nation bloc. 

These funds may have allowed it to outbid rivals as part of a deal for PPF’s telecoms businesses in Bulgaria, Hungary, Serbia and Slovakia, the EU regulator said. 

The move follows a flurry of probes under the Foreign Subsidies Regulation. So far these have targeted Chinese firms involved in clean energy and rail. In April, it raided the premises of Nuctech — a Chinese security equipment company with sites in the Netherlands and Poland. 

To date, these investigations have all focused on companies taking part in public tenders. The Emirates Telecom investigation is the first under the Foreign Subsidies Regulation to leverage the EU’s new rules to examine a potentially harmful takeover.     

“The FSR allows us to tackle distortive support from third countries for the acquisition of businesses in the EU,” the EU’s competition chief Margrethe Vestager said in a statement. “Our investigation will also assess whether e& may have received foreign subsidies that could distort fair competition in the telecom sector.”  

An e& spokesperson said the firm is cooperating with the commission as part of the review. 

Under the law, the EU has powers to vet subsidies that can distort European markets, and could issue fines, orders to suspend tenders, or outright blocks of state takeovers.

In August last year, Emirates Telecom signed a binding agreement for a controlling stake in PPF’s service and infrastructure companies in the European nations. 

PPF Telecom, part of the Czech billionaire Kellner family’s business empire, is made up of Yettel Bulgaria, Yettel Hungary, Yettel Serbia, O2 Slovakia, and CETIN and O2 Networks infrastructure businesses in those countries. 

The Kellner family, which has a net worth of $12.1 billion according to the Bloomberg Billionaire Index, is looking for potential acquisition targets in Europe as part of a strategy to shift its investment focus back to western markets following years of expansion in Asia.

EU regulators now have until October 15 to decide whether to prohibit the planned takeover or accept concessions and approve the deal.     

(Update with company statement in seventh paragraph)

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