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After Vodafone takeover, Kabel Deutschland drops bid for Tele Columbus

Kabel Deutschland's proposed acquisition of a smaller rival, which had come under scrutiny from Germany's competition regulation authority has been abandoned.
Written by Michael Filtz, Contributor

Kabel Deutschland, Germany's largest cable operator, will not pursue the acquisition of competitor Tele Columbus, the country's third-largest cable company.

The decision is directly related to Vodafone's recent takeover of Kabel Deutschland.

"With the success of the takeover bid by Vodafone, the competitive conditions in the telecommunications markets in Germany will change dramatically," a Kabel Deutschland spokesperson said.

The €603m bid was launched last May, but was blocked by the Bundeskartellamt — Germany's competition regulation authority — who said that the anti-competitive effects of the merger would be too substantial.

"The disappearance of Tele Columbus from the market would therefore further strengthen the nationwide oligopoly of the two major regional cable network operators," – meaning Kabel Deustchland and Deutsche Telekcom – Andreas Mundt, the office's president, said at the time.

In response, Kabel Deutschland submitted a remedy plan that would have provided for the divestments of some network assets, among other concessions — but the plan was quickly dismissed as not enough by the Bundeskartellamt.

At the time, Kabel Deutschland promised to appeal the decision. However, earlier this month, Vodafone made a €7.7bn takeover bid for the German cable company, which was subsequently approved by a majority of the company's shareholders as well as by the European Commission.

According to the Kabel Deutschland spokesperson, Vodafone's takeover has made the Tele Columbus takeover appeal a moot point, and noted that "time-consuming court proceedings would no longer be useful in this context".

Tele Columbus provides internet, fixed-line and TV services to around 1.7 million customers, mainly in Berlin and other cities in eastern Germany. Kabel Deutschland serves around 8.5 million customers.

Vodafone's bid for Kabel Deutschland still needs approval from the Bundeskartellamt, however. Because of the size of the deal, the investigation could take some time.

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