Clearance of Liberty’s Kabel BW deal overturned

15 Aug 2013

The Higher Regional Court of Dusseldorf has reversed a December 2011 decision by the Federal Cartel Office (FCO) to approve Liberty Global’s acquisition of cable operator Kabel BW. After hearing complaints from Deutsche Telekom and NetCologne, the court has ruled that the concessions imposed on the deal by the FCO are not sufficient enough to compensate for the increase in dominance following the merger of Kabel BW with another Liberty Global-owned cableco, Unitymedia. It explained that without the combination of the two cablecos, Baden-Wurttemberg-based Kabel BW could have in the future expanded its business to Unitymedia’s territory (North Rhine-Westphalia and Hesse), thereby increasing competition. The court has ordered the FCO to re-examine the already completed merger, and if a decision is taken to block the deal, then Kabel BW and Unitymedia will have to be unbundled.

According to TeleGeography’s GlobalComms Database, US media group Liberty Global purchased Unitymedia in January 2010 for an enterprise value of EUR3.5 billion (USD4.6 billion), before snapping up and Kabel BW from Swedish private equity firm EQT in March 2011 for EUR3.16 billion. The FCO approved the acquisition of Kabel BW in December 2011, but only after imposing a number of conditions on the deal, including the right for housing associations to terminate longer-term contracts for retail TV services. The merger was completed on 1 July 2012.

Germany, Liberty Global (incl. LGI), Unitymedia