Liberty takeover of Deutsche Telekom
threatened by regulators
LONDON - US cable magnate and Liberty Media chairman John Malone could have a fight on his hands in his bid to buy some of the assets of Deutsche Telekom, as German competition authorities prepare to block the £3.4bn deal.
The German Cartel Office is understood to have met with Malone's lawyers and told them that it would have difficulty in approving the deal because of competition laws which prevent a single telecom company from owning the network's backbone and the last mile.
The regulators are said to have invited Malone to provide further information by the end of the year in support of Liberty's case.
It is thought that the Cartel Office might reconsider, however, if Malone can prove that the deal would increase competition in areas such as telephony and broadband internet access.
The competition inquiry will be completed on January 7.
Malone met German chancellor Gerhard Schroeder earlier this month to discuss the development of the country's communications networks. It is thought that he would have indirectly tried to promote his case for foreign investment in Germany's networks.
Deutsche Telekom is 43% owned by the German government, which will seek to continue to divest its stake through secondary offerings. The company needs the money from the sale to help cut its £40.6bn debt mountain.
Liberty is also pursuing News Corporation's 22% stake in Kirch Pay-TV, which, if agreed, would provide content for the cable network.
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