Kabel Deutschland offers remedies for Tele Columbus deal

24 Jan 2013

In a bid to address concerns raised last month by the Federal Cartel Office (FCO), German cable operator Kabel Deutschland has submitted a remedy package for its proposed acquisition of indebted regional player Tele Columbus. In its preliminary legal assessment of the deal, the FCO said in December 2012 that the transaction would eliminate a significant competitor to Kabel Deutschland and Unitymedia Kabel BW – the two dominant players in the regions of Germany where they are the incumbent operators – thereby cementing their duopoly and impacting on competition in the market. The FCO added that this applied to both competition for contracts from housing associations and to the cable operators’ purchasing power over TV broadcasters. While Kabel Deutschland has said it does not share the FCO’s concerns about the deal, it has nevertheless decided to offer to sell Tele Columbus network assets in Berlin, Dresden and Cottbus with more than 430,000 homes connected, including the respective housing association contracts. The asset sales would reduce the number of subscribers by 330,000 out of a total of 1.6 million.

Kabel Deutschland entered into an agreement to acquire Tele Columbus for EUR603 million (USD769.6 million) plus accrued interest in May 2012, notes TeleGeography’s GlobalComms Database. The overall purchase price – equivalent to EUR618 million as of 31 December 2011 – will provide for repayment in full of the financial debt of Tele Columbus, which provides cable services to approximately 1.6 million customers predominantly in Berlin and in Eastern Germany, including the cities of Dresden, Magdeburg and Potsdam.

Germany, Kabel Deutschland, Tele Columbus Group (PYUR)