John Malone's Liberty Global Buys German Kabel BW for $4.5 Billion
The deal makes Liberty the No. 2 cable group in Germany.
COLOGNE, Germany – John Malone’s Liberty Global has added to its European cable empire with the $4.5 billion (3.16 billion) acquisition of Germany’s number three cabler Kabel BW.
Liberty beat out competitors -- investors CVC and Hellman & Friedman -- after upping its bid over the weekend to top CVC’s offer of $4.2 billion (2.95 billion) for Kabel BW’s 2.4 million German cable customers in the rich southern state of Baden-Wurttemberg. Current owner EQT bought Kabel BW from investor Blackstone in 2006 for around $2 billion (1.6 billion).
Liberty already controls Germany’s number two cable operation, Unitymedia, which directly serves 4.6 million homes in western Germany. Market leader is competitor Kabel Deutschland, which has 8.8 million customers spread out across the country.
The deal is particularly sweet for Malone, who was thwarted in his attempt, a decade ago, to acquire the entire cable network of old monopolist Deutsche Telekom.
Local media watchdogs blocked the deal back then and while they could still do so again, most observers expect the Kabel BW deal to secure regulatory approval.
Announcing the deal Monday, Liberty said Kabel BW and its holding company would immediately issue around $3.2 billion (2.25 billion) in new debt financing, cash that Liberty can put to use expanding the division’s subscriber base and upgrading its network.