Germany’s antitrust body the Federal Cartel Office (FCO) has published its preliminary assessment of Liberty Global’s proposed acquisition of German cableco Kabel BW, stating it is concerned that the potential deal would have a negative impact on competition in the market. US cable company Liberty Global already owns Germany’s second largest cableco by subscribers Unitymedia. The FCO said the takeover would affect the supply of TV services to properties with a number of residential units, particularly housing associations. It said that these markets are dominated by the three major cablecos – Kabel BW, Unitymedia and Kabel Deutschland – and has assessed that Liberty’s acquisition of Kabel BW would further restrict competition, as the three cableco’s do not compete with each other for supply contracts outside of their operating areas.
Last week Liberty Global offered concessions to help smooth the way for regulatory approval of its planned takeover of Kabel BW. The US firm emerged as the highest bidder to acquire Kabel BW from Swedish investment firm EQT in March 2011, beating bids from CVC and Hallman & Friedman with an offer of EUR3.16 billion (USD4.5 billion). In June 2011 the European Commission (EC) agreed to transfer jurisdiction over the investigation into the planned acquisition to the FCO, which has said that based on its preliminary appraisal it will make its final decision on the deal by 15 December 2011.