Germany’s cartel office on Wednesday made it clear that there is no welcome mat laid out for the bid by John Malone’s Liberty Media to acquire the cable assets of Deutsche Telekom.
Malone’s media ambitions, seen by some nervy Europeans as Napoleonic, has agreed a massive E5.5 billion ($4.9bn) deal with the teutonic telecoms titan. But cartel office officials are said to have told Liberty’s lawyers they would have “real trouble approving the transaction”.
But the day after the meeting, the officials insisted they were still evaluating the Liberty offer despite their “concern” that it would result in the US company having access to over half the cable homes in twelve of Germany’s sixteen regions.
A further meeting is scheduled for next week to provide the regulators with further information but, according to one involved in the negotiations, officials inferred it was unlikely they would be “able to find a way of approving the deal”.
The sticking point is the national rule that no single operator may own both the communications cornerstone – the so-called level three networks – or level four assets, the final local link to the customer's home.
Despite this barrier it is believed that the German government, which owns 43% of DT, is keen that the deal is done in order to assuage the massive E65.2 billion debt hanging around the company’s neck.
Malone is known to be eager to extend his empire into Europe and has to all intents made a commitment to pump some E10bn into Germany's communications infrastructure.
News source: Financial Times