Cable legend John Malone’s international distribution powerhouse Liberty Global was dealt a setback last week, after a German court overturned governmental approval of its 2011 purchase of Kabel BW, a deal that strengthened Liberty’s standing as the country’s second-largest MSO.
Unitymedia, Liberty Global’s German cable subsidiary, agreed to purchase Kabel BW, which had about 2.4 million subscribers, in March 2011 for $4.2 billion, creating Unitymedia Kabel BW.
The deal was finalized on Dec. 15 of that year, giving it about 7 million customers, close behind the largest German MSO, Kabel Deutschland with 8.8 million subscribers.
On Aug. 14, the Dusseldorf Higher Regional Court ruled that Germany’s antitrust agency, the Federal Cartel Office, did not impose stringent enough conditions on the deal. According to published reports, the court said the Unitymedia/Kabel BW merger could lead to a dominant market position, upholding antitrust concerns first voiced by competitors Netcologne and Deutsche Telekom.
The ruling now casts a cloud over the merger. If it is upheld, the Federal Cartel Office will have to examine whether Liberty will merely have to comply with additional conditions or if the deal will have to be unwound.