Watchdog sees complications with Liberty-Kabel deal

BONN, Germany (Reuters) - A takeover of Kabel Deutschland (Other OTC: KBDHY - news) by rival Liberty Global (NasdaqGS: LBTYA - news) would be more complicated from an anti-trust point of view than Kabel's acquisition by Vodafone (LSE: VOD.L - news) , Germany's cartel office said on Wednesday.

Vodafone on Monday agreed to buy Kabel Deutschland, Germany's largest cable operator, for 7.7 billion euros ($10.1 billion), beating a rival approach made by Liberty.

But if Liberty were to return with a counter bid it would face difficulties due to competition issues, the head of the German cartel office said.

"Without any doubt anti-trust problems will arise in the case of a merger between Liberty Global and Kabel Deutschland," Andreas Mundt told reporters at a press conference in Bonn.

Mundt also said that Liberty's 3.16 billion-euro ($4.13 billion) takeover of smaller peer KabelBW was approved in 2011 only after far-reaching conditions were set to satisfy the regulator, since it already owned Unity Media, Germany's second-largest cable operator.

Liberty is still considering its options following the Vodafone offer for Kabel Deutschland, a person familiar with the deliberations told Reuters.

However, Liberty may still face a setback in its takeover of KabelBW as Deutsche Telekom (Xetra: 555750 - news) challenged the approval decision last year in a court case which opened on Wednesday.

Liberty Global and Kabel Deutschland have been winning customers from Deutsche Telekom with their expansion into broadband.

Their cable lines, designed to deliver TV to homes, have been upgraded to carry voice calls and Internet at speeds often five times faster than competing services offered by Deutsche Telekom and others.

During the court hearing in Duesseldorf on Wednesday the terms of the KabelBW deal were closely questioned again, a spokesman for the court said.

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Watchdog sees complications with Liberty-Kabel deal

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