German regulators will today (Tuesday) announce they have blocked Liberty Media’s attempted €5.5 billion ($4.8bn; £3.4bn) purchase of six German regional cable-TV systems from Deutsche Telekom.
The Cartel Office is due to hold a press conference today, though a copy of the document containing the decision has already fallen into the hands of German newspaper Handelsblatt.
The US group had hoped to turn the German systems into the heart of a European expansion programme. However, the regulator ruled that acquiring 60% of Germany’s cable market would give it too much power to set prices and edge out rivals. It rejected the company’s claim that satellite would eventually provide sufficient competition.
Liberty was recently warned that the deal would be blocked unless it vowed to upgrade the systems to carry telephone and high-speed internet services – a concession the American firm rejected as too expensive [WAMN: 29-Jan-02].
Eager to reduce debt, Telekom will have to hold a new auction for the systems. One potential bidder that has already expressed an interest is London brokerage Compere, which said it would have no problem finding the money alongside unnamed financial partners.
Data sourced from: Financial Times; New York Times; Handelsblatt (Germany); additional content by WARC staff