EC launches in-depth review of Telenet/De Vijver deal
The European Commission has launched a Phase II investigation into Belgian cableco Telenet’s proposed acquisition of Flemish broadcaster De Vijver Media.
In June, the Liberty Global subsidiary agreed to buy 50% of De Vijver by indirectly acquiring…
The European Commission has launched a Phase II investigation into Belgian cableco Telenet’s proposed acquisition of Flemish broadcaster De Vijver Media.
In June, the Liberty Global subsidiary agreed to buy 50% of De Vijver by indirectly acquiring Finnish group Sanoma’s 33.3% stake in the TV network for €26m and injecting €32m into the business in exchange for stock.
The EC is concerned that as Telenet is Flanders’ leading cableco and De Vijver owns two of the region’s most popular Dutch-language free-to-air TV channels, the transaction may lead to competitors being cut out of the Flemish market.
It is worried that the tie-up could weaken Telenet’s competitors by either making it more difficult for the buyer’s rivals to get access to its cable platform, and/or that access conditions for De Vijver’s two channels may worsen.
“Given the importance of the Telenet platform to reach end users in Flanders, such a strategy of shutting out competitors may negatively impact the ability of these channels compete and to innovate,” the Commission said in a statement.
The EU’s antitrust watchdog is worried that if its fears are realised then consumers could end up paying higher prices.
Liberty notified the Commission of the transaction on 18 August and the regulator said the deadline for its decision has been set for 5 February 2015.
When the deal was announced in June, Telenet said it would not be consolidating De Vijver and that its participation in the TV network would not result in changes to the agreements it has with other television providers.
The remaining 50% of De Vijver is split between its CEO Wouter Vandenhaute and his business partner Erik Watte, who together own 25% through their company W&W, and local media group Corelio, which holds the final 25%.
The acquisition is part of Liberty’s broader strategy to invest in content. The cableco’s CEO Mike Fries is of the view that vertical integration between cable operators and content providers makes sense.
