Liberty could exit Germany if antitrust pressure heats up

8 Dec 2014

Liberty Global could leave Germany if pressure from competition regulators halts the US company’s growth ambitions in the market, sources have told Reuters. In January 2010 Liberty purchased Unitymedia, which operates cable networks in the federal states of North Rhine-Westphalia and Hesse, for an enterprise value of EUR3.5 billion (USD4.4 billion), before snapping up Baden-Wurttemberg-based Kabel BW from Swedish private equity firm EQT in March 2011 for EUR3.16 billion. The merger of Unitymedia and Kabel BW was completed on 1 July 2012, creating Germany’s second largest cable operator, but last year a regional court reversed the 2011 antitrust approval of the KabelBW acquisition and ruled that regulators must re-examine the deal. Unitymedia filed a complaint against the ruling, though a decision is still pending and could take months, Reuters writes. If the federal court upholds the ruling, Unitymedia KabelBW could be forced to make concessions to protect competition, or even unwind the merger. According to two people familiar with the company’s thinking, Liberty is open to selling Unitymedia KabelBW, although Liberty’s CFO Charles Bracken told Reuters that he expected the obstacles in the country to be overcome. ‘In Germany we are facing a shakedown from the regulators. But the KabelBW transaction will not be unwound. We are working to negotiate a solution with regulators,’ the executive was cited as saying.

Germany, Liberty Global (incl. LGI), Unitymedia