The European Commission is set to block Vodafone's proposed takeover of German cable operator Unitymedia from Liberty Global due to competition concerns, two people familiar with the matter told Reuters. The Commission will soon send a statement of objections on the deal to the companies, according to the report.
The Commission opened in December an in-depth investigation of the acquisition, which also includes Liberty Global's cable business in Hungary, Romania and Czech Republic, for a total of EUR 18.4 billion. The German cartel regulator also asked to look at the deal due to concerns about the impact on the local market of merging Unitymedia with Vodafone's existing cable and mobile business.
The deal would eliminate a competitor from the German market and could discourage the new company from competing effectively with the remaining operators, both in areas already served by Unitymedia and in Germany as a whole, the Commission said. The deal could also lead to less investment in next-generation networks and give the merged company too much power in negotiations with TV broadcasters.
Vodafone and Liberty Global will have the opportunity to respond to the objections and propose concessions in order to still gain clearance for the takeover. The Commission has set a preliminary deadline of 02 June for a final ruling on the deal.
