News - World: Brussels has initiated its first anti-subsidy investigation targeting foreign buyers of EU assets, utilizing new powers to scrutinize a multi-billion euro telecom deal involving a UAE-owned company.

While the exact timing remains uncertain, the investigation is expected to be announced as early as Monday, according to three sources directly familiar with the matter.

E&, formerly known as Etisalat and majority-owned by the UAE government, struck a €2.2 billion deal to buy the assets last August, receiving approval from relevant national competition regulators. The Commission is concerned that the Abu Dhabi-based company received state funds amounting to unfair subsidies to complete the deal. It also questioned whether the government funding could give e& an edge over its EU competitors, undermining fair competition.

To launch such an in-depth investigation, the Commission needed to find indications of subsidies distorting the market, according to sources familiar with the probe. Two of these sources noted that e& is expected to argue it did not receive any government support from the UAE that would undercut its rivals.

Foreign buyers of EU assets have not previously faced similar restrictions to the bloc's state aid regime, which monitors public support to prevent member states from giving financial advantages to national companies.

The EU's Foreign Subsidy Regulation, enacted last year, aims to prevent non-EU companies from gaining unfair advantages from cash-rich governments, like China, when acquiring European assets. So far, cases under the foreign subsidy regime have only targeted Chinese companies in contexts involving bids for public contracts or direct subsidies.

The e& investigation will also mark the first time the EU uses its powers to scrutinize an asset acquisition. Last month, two Chinese bidders withdrew from a tender to supply a solar power complex in Romania after Brussels opened a detailed probe into the alliances bidding to develop the project.