European Commission - Press release
Mergers: Commission refers Liberty Global planned acquisition of German cable company KBW to German competition authority
Brussels, 17 June 2011 - The European Commission has referred the assessment of the proposed acquisition of Kabel Baden-Württemberg (KBW) by Liberty Global Inc. (LGI) to the German competition authority (Bundeskartellamt) at the latter request. After a preliminary investigation, the Commission found that the proposed transaction may significantly affect competition in the market for the provision of free-TV services to housing associations, where contracts with tenants are negotiated collectively, a big market in Germany.
The transaction was notified to the Commission on 19 April this year. Germany asked for the referral of the case on 16 May arguing that it threatened to significantly affect competition in some of its domestic TV-related markets. Currently, there are three regional cable TV operators in Germany: Kabel Deutschland, Unitymedia (owned by LGI since 2010) and KBW. The proposed transaction would, therefore, bring together the number two and three regional cable TV operators in the country. The proposed transaction will now be examined by the Bundeskartellamt under national law.
The Commission's preliminary investigation, conducted in close and trustful cooperation with the Bundeskartellamt, revealed that the proposed transaction risks to significantly affect competition for the retail supply of free-TV services to housing associations in Germany. While regional cable operators are currently not competing with each other, it cannot be excluded that this is the result of co-ordination among the operators and that the proposed transaction could strengthen such coordinated effects between the three regional operators in Germany. Moreover, the proposed transaction might threaten to affect competition in the national market for the wholesale supply of TV signal transmission services.
The Commission decided to refer the entire case to the Bundeskartellamt because almost all the markets potentially affected are national or regional and the Bundeskartellamt has significant experience in this sector.
The companies and products
LGI is an international cable operator. It owns and operates cable networks offering TV, broadband internet and voice telephony services in 11 countries across Europe (including Belgium, Germany, Austria and Switzerland). In Germany, LGI owns Unitymedia, which is the second largest cable operator in the country and operates cable networks in the German federal States of Hessen and Nordrhein-Westfalen.
KBW is a regional cable network operator in Germany providing TV, broadband internet and voice telephony services to customers in the German federal State of Baden-Württemberg.
Together with Kabel Deutschland they operate in distinct parts of Germany from TV-related markets (e.g. free-TV, pay-TV, Video on demand, upstream licensing and signal delivery markets) and telecommunications related markets (e.g. voice telephony, broadband internet).
Merger control rules and procedures
The Commission, in 1989, was given the power to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation). Its duty is to prevent concentrations that would significantly impede effective competition in the European Economic Area (EEA)2 or any substantial part of it.
The vast majority of mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).
A non-confidential version of today's decision will be available at:
Amelia Torres (+32 2 295 46 29)
Marisa Gonzalez Iglesias (+32 2 295 19 25)