Liberty Global Inc. (LBTYA) said it hasn’t prepared alternatives to buying Kabel Baden-Wuerttemberg GmbH in Germany because it offered “comprehensive” concessions that should persuade antitrust regulators to approve the deal.
There is no “plan B” to the takeover, Lutz Schueler, head of Liberty’s Unitymedia cable-television unit, said today at a briefing at the division’s headquarters in Cologne, Germany. A combination makes sense because it strengthens Unitymedia’s growth potential, he said.
Germany’s Federal Cartel Office said on Oct. 28 that plans by Liberty Global, the world’s second-largest cable operator, to buy Kabel BW would exacerbate an existing, region-based oligopoly. Among concessions Liberty Global offered was removal of encryption of digital-TV signals carried on cable networks to enable competitors like Deutsche Telekom AG (DTE) and Vodafone Group Plc (VOD) to provide free digital channels alongside pay TV.
“With these steps, there will be much more competition,” Schueler said. “We are convinced that with these remedies we can alleviate the cartel office’s concerns.” Unitymedia is “a stable operating business, but of course with Kabel BW there it would be a significantly stronger growth case.”
The cartel office, which is scheduled to decide on the transaction by Dec. 15, is evaluating the proposals and will seek feedback from broadcasters and housing associations, Schueler said.
It would be “speculative” to discuss any additional measures that Englewood, Colorado-based Liberty Global might be willing to make, Ton Tuijten, the company’s general counsel, said at the briefing.
Liberty Global has owned Unitymedia since 2010 and made its offer for Kabel BW, which is based in Heidelberg in the southwestern German state of Baden-Wuerttemberg, in March. Germany’s third main cable operator is Kabel Deutschland Holding AG, based near Bavaria’s capital, Munich, in the southeast.
The Financial Times reported today that Chief Executive Officer Mike Fries said consolidation in Europe is a “critical strategic goal.”
“We are always looking at all markets, but there are no current projects,” Manuel Kohnstamm, Liberty Global’s managing director of public policy, said today.
The cable operator, which is controlled by U.S. billionaire John Malone, has a “solid” balance sheet and wouldn’t have trouble financing further consolidation in Europe, Tuijten said.
The company has previously expressed an interest in Ziggo BV in the Netherlands. Kohnstamm reiterated today that Ziggo’s owners “clearly prefer” an initial public offering.
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