The European Commission (EC) has cleared US cable giant Liberty Global’s acquisition of UK counterpart Virgin Media in deal worth €17.2bn (US$23.3bn).
The European Union antitrust regulator announced today that its investigation of the deal…
The European Commission (EC) has cleared US cable giant Liberty Global’s acquisition of UK counterpart Virgin Media in deal worth €17.2bn (US$23.3bn).
The European Union antitrust regulator announced today that its investigation of the deal confirmed it would not raise competition concerns, particularly as the companies operate cable networks in different member states. Also, the merged entity will only have a limited market position in the wholesale of TV channels in the UK and Ireland.
Liberty is Europe’s largest cable operator, while Virgin Media is the UK’s second-largest pay TV operator after BSkyB.
The EC noted that it paid particularly close attention to the markets for TV content acquisition in the UK, Ireland and wider European Economic Area.
“The Commission concluded that the proposed acquisition would not restrict competition in these markets because TV content is licensed mainly on a national basis or for linguistically-homogenous areas and because the merged entity would still face sufficient competitive restraint from other players such as TV content providers and competing TV retailers,” the Brussels-based regulator said in a statement.
The EC said it also examined the vertical link between Liberty’s wholesale supply of pay TV channels and Virgin Media’s acquisition and retail sale of pay TV services.
“The Commission concluded that the merged entity is unlikely to shut out competing pay TV retailers by withholding its TV channels from them, given its very limited presence in the wholesale supply of TV channels and the incentive to license its TV channels as broadly as possible.
“Similarly, it is unlikely that the merged entity would shut out competing TV channel broadcasters from access to the retail Pay TV market, given the number of alternative distribution platforms to Virgin Media’s cable network (e.g. BSkyB’s satellite platform) and the importance of offering a large variety of TV channels in order to attract Pay TV subscribers.”
The cablecos first announced the agreement in early February and the transaction was notified to the commission a month later.
Liberty Global provides TV, broadband internet and telephony services in 10 EU member states, including Ireland but excluding the UK. However, its content division Chellomedia produces and supplies TV channels to TV operators, including in the UK.
Virgin Media provides pay TV, broadband internet and fixed and mobile telephony services in the UK.
