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Antitrust body clears Liberty’s purchase of Kabel BW

16 Dec 2011

Germany’s antitrust body, the Bundeskartellamt, has announced it has cleared Liberty Global’s acquisition of the country’s third largest cableco by subscribers Kabel BW, subject to certain conditions and obligations. US cable company Liberty Global, which already owns Germany’s second largest cableco Unitymedia, offered a series of concessions in order to smooth the way for approval of the merger. Under one such remedy, housing associations with more than 800 housing units in the network areas of Unitymedia and Kabel BW will be granted a special contract termination right for retail TV services. This will offer them an earlier opportunity to look for an alternative network operator for their housing units. Furthermore, Liberty undertakes to end its encryption of digital free TV programmes, which will make it easier for rival companies to compete for retail TV service contracts. The Bundeskartellamt said it believes that these conditions will increase the competition opportunities of other providers and compensate for the negative impact of the merger, and has therefore approved the deal.

Liberty Global said in a statement that following receipt of regulatory approval, it has completed the purchase of Kabel BW, in accordance with the terms of its previously announced acquisition agreement. ‘This is a major step forward for German consumers and our company,’ commented Mike Fries, president and CEO of Liberty Global, adding: ‘The combination of Unitymedia and KBW creates a powerful platform for innovation and growth. Together, our German operations pass over twelve million homes, provide over ten million subscription services and generate approximately EUR1.6 billion (USD2.08 billion) in annualised revenue. It’s well known that the cable industry in Germany is the primary source of infrastructure-based competition with the incumbent Deutsche Telekom, and we intend to capitalise on the opportunity to bring German consumers the most advanced broadband and digital TV products available.’ Liberty Global 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.

Germany, Kabel BW, Liberty Global, Unitymedia

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