German incumbent Deutsche Telekom and cableco NetCologne have lodged an objection with the Düsseldorf Higher Regional Court against the Federal Cartel Office’s approval of the takeover of cable operator Kabel BW (KBW) by US media giant Liberty…
German incumbent Deutsche Telekom and cableco NetCologne have lodged an objection with the Düsseldorf Higher Regional Court against the Federal Cartel Office’s approval of the takeover of cable operator Kabel BW (KBW) by US media giant Liberty Global.
The two complainants allege the transaction will have an unacceptably negative effect on competition in the domestic market, a Deutsche Telekom spokesman told TelecomFinance.
He added the companies are particularly concerned about the takeover’s impact upon cablecos’ agreements with housing associations, believing current concessions are “insufficient”.
The cartel office approved the deal late last year subject to conditions based upon Liberty’s improved remedy package, designed to address competition concerns in the cable sector.
The package included proposals to waive exclusivity in contracts with housing associations as well as ownership rights of their in-building networks.
In addition, certain larger housing associations have the right to prematurely cancel long-term contracts for cable services to enable them to consider more cost-effective alternatives.
The Deutsche Telekom spokesman said the company hoped that either Liberty would agree to further concessions or that the takeover would be prevented altogether.
But a cartel office spokesperson told TelecomFinance that the court filing cannot suspend the deal, which has already been approved and closed in late December 2011.
DT and NetCologne now have two months to submit details of their complaint to the court, the spokesperson added.
Liberty completed the acquisition of KBW in mid-December for €3.16bn (US$4.1bn). At the time, CEO Mike Fries described the union of Liberty’s German subsidiary Unitymedia and KBW as “a powerful platform for innovation and growth” providing more than 10 million subscription services.
A Liberty spokesman said the company is “highly confident” the office’s approval of the takeover will be upheld in court.
“We expect to support the FCO in defending the decision and see no material consequences for the ongoing integration and development of our German operations,” he said.
