The £8.2 billion cable merger between NTL and Cable & Wireless Communications (CWC) has been approved by the secretary of state following recommendations passed from the Competition Commission at the end of last month (see Competition Commission Reports On NTL/CWC Merger). Despite concerns from trade and industry secretary, Stephen Byers, that the merger might be anti-competitive in the television marketplace, the Commission concluded that the deal will not adversely affect competition or consumers.
The merger of the two groups will create the UK’s largest cable company with almost eight million homes set up to receive cable television and telephone services. Of these, around two million have already signed up for such services. The merger also represents one of the closing stages in the gradual consolidation of the cable market, leaving only Telewest Communications, with 4.4 million homes passed, as the other major player. Telewest has itself secured a merger with pay-TV channel producer Flextech (see Telewest And Flextech Merger Cleared By DTI).
Commenting on the clearance, NTL’s president and chief executive Barclay Knapp, said: “I am delighted by the secretary of state’s announcement allowing NTL to proceed with the acquisition of CWC ConsumerCo. We are now able to plan ahead with confidence and will be aiming to complete the deal as soon as possible.”
Graham Wallace, chief executive of CWC, added: “I am naturally very pleased with this decision which is major step forwards towards final completion. This is very good news for Cable & Wireless, NTL and our customers in the UK.”
However, the deal cannot be completely finalised until the Department of Trade and Industry (DTI) has completed its investigation into France Telecom’s investment in NTL. NTL is using the money gained from the sale of stake in the company to France Telecom to fund the takeover bid for CWC (see France Telecom Takes £640m Stake In NTL To Back CWC Bid).
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