Cable Operators

Liberty Global Offers $10B For Kabel Deutschland

Deal Sets Up Possible Bidding War With Vodafone 6/18/2013 6:09 AM Eastern

Liberty Global made a play to further consolidate the German cable market, lobbing in an $10 billion offer to acquire Kabel Deutschland in a deal that would pit it against European phone giant Vodafone in a possible bidding war for the largest cable operator in Germany.

Liberty’s offer comes says after Vodafone reportedly made an $9.6 billion proposal to Kabel Deutschland that was kicked back to the European phone giant as too low. According to reports, Vodafone is considering raising its offer.

Kabel Deutschland, also known as KDG, is the largest cable operator in Germany with 8.5 million customers. Liberty Global’s Unitymedia subsidiary is the second largest MSO in Germany, with about 7 million subscribers.

Kabel Deutschland confirmed that it has received a preliminary offer from Liberty Global, but declined further comment.

Liberty launched its first bid to dominate the German cable landscape in 2001, when it attempted to buy Kabel Deutschland’s predecessor company, Deutsche Telekom. The Bundeskartellamt, Germany’s top regulatory agency, responded by blocking the deal and forcing DT to break up into three separate parts — Unity Media, Kabel BW and Kabel Deutschland. Liberty made a play for Kabel Deutschland, the bigger of the three MSOs, in 2010, but the cabler opted to conduct an initial public offering instead.

Later that year, Liberty Global purchased Unity Media for $5.2 billion and in 2011 purchased Kabel BW for about $4 billion, combining the two to form Unitymedia KabelBW, the second-largest MSO in the country.

But since that time the regulatory environment has softened, and in April, according to reports in the German press, Liberty was again talking to KDG officials about a possible deal.

Liberty Global has been on an acquisitions tear of late. Earlier this month it completed it purchase of U.K cable company Virgin Media for about $16 billion, and in March it purchased a minority stake in Dutch cable operator Ziggo for about $800 million.

    

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