Liberty Media’s agreed E5.5 billion deal to acquire six cable franchises from German media group Deutsche Telekom looks set be approved by the country’s Government, despite speculation that it might be blocked on competition grounds (see Liberty Media’s Deutsche Telekom Cable Deal Hits Regulatory Snags).
The German Cartel Office is known to be concerned that the acquisition will give Liberty control of the majority of the country’s cable infrastructure, including the crucial ‘last mile’ network which connects the cable backbone to customers’ homes (should the deal go according to Liberty’s plan).
Analysts at ABN Amro today report that the German Government is now looking set to allow the US company to make the acquisition. It has been noted that the Government is a significant shareholder in the debt-laden Deutsche Telekom; the sale of the cable franchises will allow the company to pay of a chunk of this debt.
Liberty linked with NTL Recent reports also claim that Liberty Media might be interested in buying into UK cable company NTL. Liberty already holds a 25% stake in rival UK cable group, Telewest Communications, and so such a move would be widely seen as the precursor to a merger between NTL and Telewest, creating a single dominant player in the cable market here.
However, analysts note that if the German deal does go ahead, Liberty Media will become the dominant cable operator in Europe and is therefore less likely to be keen to jump straight into the UK market.
This would be good news for BSkyB, notes ABN, as its main rivals in the digital television market – which Sky leads – would remain divided.
