Germany blocks KDG’s acquisition of Tele Columbus

Following Kabel Deutschland’s (KDG’s) announcement last week that the Bundeskartellamt (also known as the Federal Cartel Office – FCO) had rejected its remedy package for the proposed acquisition of smaller rival Tele Columbus, the German antitrust agency has said that it has now prohibited the cableco’s takeover plans. ‘After intensive investigations, in particular with regard to the commitments offered by KDG, the Bundeskartellamt has concluded that the anti-competitive effects of the concentration are too substantial to allow for a clearance of the project,’ commented Andreas Mundt, president of the FCO, adding: ‘Tele Columbus is KDG’s main competitor in ‘the new Lander’. Both companies are direct competitors in Berlin and in almost all other conurbations in eastern Germany. With the merger, the housing industry in many areas would lose a competitive alternative to KDG. The disappearance of Tele Columbus from the market would therefore further strengthen the nationwide oligopoly of the two major regional cable network operators [KDG and Unitymedia-Kabel BW].’ KDG entered into an agreement to acquire Tele Columbus for EUR603 million (USD769.6 million) plus accrued interest in May 2012, TeleGeography’s GlobalComms Database notes. Last month KDG offered to sell Tele Columbus’ network assets in Berlin, Dresden and Cottbus, including the respective housing association contracts, but the FCO said that these proposed network divestments were not enough to overcome its concerns. It added that the divestment of approximately 60% of the Tele Columbus networks in Eastern Germany would be required – twice as many as offered by KDG. The FCO’s decision is not yet final; the companies have a month to appeal the decision to the Dusseldorf Higher Regional Court.