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John Malone's Unitymedia Completes Acquisition of KabelBW

John Malone
Matthew Staver/Bloomberg via Getty Images

The $4 billion deal creates a cable giant, which reaches 12.5 million households across Germany.

COLOGNE, Germany - Unitymedia, the German cable operator owned by John Malone's Liberty Global, has completed its $4 billion takeover of regional operator Kabel BW.

The deal creates a new European cable giant with access to 12.5 million households in three of Germany's largest and most lucrative states: NRW, Hessen and Baden-Wurttemberg.

While cable cord cutting by consumers switching to online television offerings has hurt operators in the United States, according to some observers, the German cable market continues to grow.

Liberty Global CEO Mike Fries told an industry crowd at the ANGA Cable show in Cologne last month that Germany represented the company's "best investment," noting that "50 percent of our growth" and 25 percent of operating cash flow comes from the German cable market.

But Liberty Global is facing a showdown in the German market with the country's public broadcasters as TV networks in Europe pay for carriage, while in the U.S. distributors pay networks.

Public networks ARD, ZDF and Arte all recently cancelled their carriage contracts with Unitymedia, Kabel BW and competitor Kabel Deutschland, saying they will no longer pay the operators around $75 million a year to carry their programming. The battle between the cable companies and the broadcasters is expected to heat up in the coming months before the current contracts expire at the end of the year.