Cable Operators

German Regulator May Nix Mega-Deal

8/24/2004 5:57 AM Eastern

A deal that would create one of Europe’s largest cable companies is in jeopardy.

Germany’s Federal Cartel Office said Tuesday that it plans to block Kabel Deutschland GmbH's purchase of cable operators Ish, KabelBW and iesy, AP reported.

The 2.7 billion euro ($3.3 billion) deal would further strengthen Kabel Deutschland's "dominant position" in the German market, the regulator said.

"A comparison with network monopolies in electricity or gas is obvious," Federal Cartel Office head Ulf Boege told AP. "No one would want the entire power network to be in the hands of one operator."

Kabel Deutschland -- which is owned by The Goldman Sachs Group Inc., Apax Partners and Providence Equity Partners Inc. -- has 10 million customers, and the acquisitions of the three operators would add more than another 7 million.

The operator said it plans to invest 500 million euros ($607 million) over the next three years to upgrade cable systems and roll out digital-television services using a single nationwide standard for set-tops.
Kabel Deutschland has until Sept. 8 to respond to the regulator’s concerns, and a final ruling on the deal is expected in October, according to AP. The operator said it still hopes to reach an agreement on the deal.

October