EC launches in-depth investigation into Liberty Global’s proposed acquisition of Dutch cableco Ziggo

9 May 2014

The European Commission (EC) has opened an in-depth investigation to assess whether the proposed acquisition of Dutch cable operator Ziggo by US-based group Liberty Global, headquartered in London, UK, is in line with EU merger regulations. In a statement the EC notes that Liberty Global, acting through its subsidiary UPC, and Ziggo both own cable networks in the Netherlands for the provision of a range of telecoms and pay-TV services, including offering premium pay-per-view TV channels. However, the Commission is concerned that the merger may reduce competition in the Dutch market by lowering the number of active cablecos, and as such, is investigating – without prejudice – the US firm’s proposal. It says it now has 90 working days, until 18 September 2014, to make a decision.

The statement reads: ‘The Commission’s initial market investigation indicated that the proposed acquisition would raise competition concerns in the Dutch markets for (i) the acquisition of individual Dutch language audio visual content, (ii) the acquisition of TV channels, (iii) the wholesale supply of premium pay-TV film channels, and (iv) the retail provision of fixed internet access, TV and fixed telephony services.’

According to TeleGeography’s GlobalComms Database, in January this year Liberty Global, which already owns 28.5% of Ziggo, agreed to acquire the remainder for EUR6.9 billion (USD9.44 billion) in a cash and shares transaction, ahead of a proposed merger with its existing Dutch cable business UPC, creating a firm with more than four million customers and networks passing over 90% of all homes in the Netherlands. Under the deal, Ziggo shareholders will receive EUR11 in cash plus 0.2282 Liberty Global Class A ordinary shares and 0.5630 Liberty Global Class C ordinary shares for each Ziggo share. Including debt, the agreement values Ziggo at around EUR10 billion. Liberty Global expects to realise EUR160 million in annual cost savings from combining the two businesses.

Ziggo has noted the EC’s 8 May announcement but declined to comment further.

Netherlands, Liberty Global (incl. LGI), VodafoneZiggo