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KDG to raise EUR800 million for acquisitions?

13 Jan 2010

German cable operator Kabel Deutschland (KDG) aims to raise over EUR800 million (USD1.16 billion) for possible mergers and acquisitions, Reuters reports, citing a spokeswoman for the company. The announcement follows US-based Liberty Global Inc’s acquisition of German cableco Unitymedia in November 2009. According to TeleGeography’s GlobalComms Database, KDG has long expressed an interest in acquiring struggling rival Tele Columbus and its sister company PrimaCom; creditors of Tele Columbus took control over the indebted company last week after its parent Orion Cable sold the operation for EUR2.5 million. However, Germany’s antitrust agency, the Federal Cartel Office (FCO), would probably oppose further consolidation in the cable market, and would likely view a takeover of Tele Columbus by KDG as enhancing competition against incumbent telco Deutsche Telekom (DT). An attempt by KDG to take an 18.6% stake in PrimaCom was blocked in June 2007 by the FCO, which claimed it had not been officially notified of the deal. The purchase would have increased KDG’s holding in PrimaCom to 36.1%. Three months later, KDG agreed to tender its stake in PrimaCom to Orion Cable Group, in a deal which saw Orion selling certain network assets to KDG, including 1.2 million subscribers in eight federal states.

KDG is also looking to delay paying up to EUR1.3 billion in debt until March 2014, instead of by original maturity dates in 2012 and 2013. Altogether the company owes over EUR3 billion to its lenders.

Germany, Kabel Deutschland, Tele Columbus Group (PYUR)

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