A German higher regional court has overturned the antitrust clearance of Liberty Global (LGI)’s takeover of KabelBW, saying the competition authority did not demand tough enough concessions.
The Dusseldorf Higher Regional Court announced today that it…
A German higher regional court has overturned the antitrust clearance of Liberty Global (LGI)’s takeover of KabelBW, saying the competition authority did not demand tough enough concessions.
The Dusseldorf Higher Regional Court announced today that it has cancelled the Federal Cartel Office (FCO)’s December 2011 decision to approve the now-completed deal, which saw John Malone’s LGI acquire Germany’s third-largest cableco for about US$4.1bn.
The FCO’s approval was subject to an improved remedies package submitted in November by LGI, whose German operations are run by the merged Unitymedia KabelBW.
The higher regional court upheld complaints by incumbent telco Deutsche Telekom and triple-play operator Netcologne, saying the FCO-approved concessions do not compensate adequately for the merged company’s improved position in the market.
The court said the cartel office should re-examine whether the merger can be permitted under amended terms and, if not, the already-completed deal must be undone.
The court also noted that the relevant parties and the FCO may file a complaint with the Supreme Court to be allowed to appeal against the decision.
An LGI spokesperson said the company will use all legal means available to go before Germany’s Federal Court of Justice and appeal against the ruling.
“Given the progress being made in market consolidation, we are convinced that infrastructure competition needs the combined Unitymedia KabelBW company more than ever so that sustainable competition can be created with the three national companies: Deutsche Telekom, Vodafone/KDG and O2/E-Plus.”
The German cable and telecoms sectors could soon experience a dramatic shake-up. Vodafone has made an €87 per share (possible total €7.84bn) takeover offer for Kabel Deutschland (KDG), which shareholders have until 11 September to accept. Meanwhile, Telefonica Deutschland (O2) has agreed to buy Dutch telco KPN’s German unit E-Plus for a total €8.1bn. Both deals are subject to relevant approvals. LGI also made a preliminary bid for KDG but later conceded defeat to Vodafone.
