EC clears Liberty's Telenet takeover
EmptyBRUSSELS -- The European Commission on Monday formally cleared the takeover of Belgian broadband and cable operator Telenet by the European unit of cable operator Liberty Global.
At the same time, the commission -- the European Union's antitrust authority -- gave the green light to Telenet's acquisition of Liberty Global subsidiary UPC Belgium in a related deal.
"The operation is based on two connected transactions," the EC said. "These two operations are closely connected and economically interdependent and have therefore been considered by the commission as one concentration."
Telenet will purchase UPC Belgium from Liberty Global for €187 million ($246 million) in cash. UPC Belgium is Liberty's Belgian cable provider and Telenet's main rival with 125,000 subscribers. Liberty Global -- controlled by U.S. cable mogul John Malone -- is Telenet's main shareholder.
The EC said its investigation into the effects of the planned operation on the Belgian cable TV market revealed only marginal issues of overlap. It also noted that TV broadcasters interested in reaching customers along the linguistic frontier between Belgium's Dutch-speaking regions and the Netherlands did not tend to negotiate the conditions of distribution on cable networks on a transnational basis.
Earlier this month, Telenet posted its first ever net annual profit, €8.5 million ($11.2 million) on revenue of €813.5 million ($1.1 billion) in 2006. It came after a net loss of €77 million in 2005 on revenues of €733.5 million. Based in the town of Mechelen, north of Brussels, Telenet employs 1,600 people and provides cable TV, Internet and telephone services to some 2.6 million customers. It provides its cable services through networks of 16 local municipal cable operators.
The company, which offers access to the Internet and phone services, rolled out a digital television service in 2005, challenging Belgium's dominant telephone company Belgacom. Telenet, which floated on the Euronext Brussels stock market in October, has a total market capitalization valued at about €2.1 billion ($2.8 billion).