Liberty Global, the US-based cable television operator controlled by the billionaire media mogul John Malone, is buying Unitymedia, Germany’s No 2 cable operator, for $3 billion (£1.8 billion).
Liberty Global said that it would also assume $2.2 billion in debt from Unitymedia, which is owned by a group of shareholders led by BC Partners of London and Apollo Management of New York.
The deal finally sees Mr Malone, 68, gain a foothold in Europe’s largest market. The cable television pioneer, who has helped to shape the industry with a string of spectacular deals over the past three decades, has been interested in the German market for some time, but an attempt to buy Deutsche Telekom’s cable television network was blocked by regulators in 2002.
With Unitymedia Mr Malone will get the largest cable operator in the states of North Rhine-Westphalia and Hesse, two of Germany’s most densely populated and prosperous states that cover ten of Germany’s biggest cities, including Cologne, D?sseldorf and Frankfurt.
The company, based in Cologne, has just under five million subscribers and has a potential coverage of about nine million homes.
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Mike Fries, chief executive of Liberty Global, said that the addition of Unitymedia would increase the company’s European presence and add significant scale to its global operations.
Mr Fries said: “We are excited about this transaction as it complements our existing European footprint and has significant untapped growth potential in one of the fastest growing cable markets in Europe.”
He added that Unitymedia suited Liberty Global because it had an upgraded network, an experienced management team and a good product offering. He said that he expects the companies to benefit from synergies in procurement and network operations.
Unitymedia said the deal is expected to close in the first half of next year, subject to regulatory approvals, and would increase customers’ access to new technology. It said: “With LGI’s backing, Unitymedia will become an even stronger competitive force.”
Liberty Global is already active in ten European markets including Austria, Belgium, the Netherlands and Slovakia and is connected to nearly 12 million customer households. Its other main international operations are in Japan, Chile and Australia.
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Unitymedia had been planning a €500 million stock sale as recently as a month ago. Andrew Newington, a partner at BC Partners, told Bloomberg: “Liberty, which had been watching us closely and had been thinking about this deal for many years, approached us with a bid in the last two weeks and we came to an agreement in the early hours.”
In addition to being chairman of Liberty Global, Mr Malone is also chair of Liberty Media, a cable TV, satellite and investment company with holdings in North America and Europe, which owns QVC home-shopping channel as well as the Starz pay-movie channel.
Liberty Global was formed in 2005 when Mr Malone broke up Liberty Media, spinning off its international interests into a separate company. Although based in Colorado, it operates largely outside the US.
Shares of Liberty Global, which trade on Nasdaq, fell almost 8 per cent to $21.26.
Mr Malone, who is also chief executive of holding company Discovery, rarely speaks in public. He has allegedly been nicknamed “Darth Vader” by Al Gore, former US Vice-President, and was likened to a swamp alligator by one commentator, David Elstein.