Liberty Buys German Cable Systems

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Liberty Media Group has reached an agreement to purchase German cable
operations from Deutsche Telekom AG for a reported $4.7 billion, giving the
Denver-based company a stronghold in the world's second-largest television
market behind the United States.

Liberty will acquire cable operations with about 3 million subscribers that
pass about 10 million homes in six German regions. The deal is expected to be
finalized in July, pending regulatory approvals.

Liberty had originally planned to buy a 55 percent interest in the German
systems with partner London-based private-equity firm Klesch & Co. Ltd. for
about $2.5 billion. But that deal, announced in February, hit snags as Liberty
and DT haggled over price.

In the end, it appears that DT and Liberty believed it would be easier for
Liberty to just buy the cable operations outright. Separately, Liberty reached
an agreement to grant Klesch an option to buy 24.9 percent of the systems.

'[The current deal] allows us some flexibility to run the company the way we
would like to run the company and build the structure the way we would like to
build it,' Liberty spokeswoman Julie Gleichmann said. 'At some future point, we
have the opportunity to bring in other partners.'

Liberty, which has substantial cable holdings in Latin America, completed a
deal last month to acquire up to a 51 percent interest in UnitedGlobalCom Inc.,
a Denver-based company that has about 10 million subscribers in Europe
(including interests in 1.8 million cable customers in Germany), for $1.2
billion in cash.

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