Vodafone Seeks EU Nod for German Deal With Telefonica Pledge
(Bloomberg) -- Vodafone Group Plc is seeking to address European Union concerns over its 18.4 billion-euro ($20.6 billion) bid for Liberty Global Plc’s cable assets by offering rival Telefonica SA wholesale access to its entire German cable network.
The Spanish company’s local unit Telefonica Deutschland would be able to use the combined Vodafone and Unitymedia high-speed network across Germany under the proposal, Vodafone said in an emailed statement. That would allow it to offer internet access and TV services to 24 million customers at speeds of up to 300 Mbps, “superior to the highest available speeds offered by wholesale” cable access, it said. The companies didn’t disclose commercial details of the deal.
Vodafone needs EU approval to buy almost a third of Liberty Global, scooping up cable assets in Germany and eastern Europe. The European Commission said in a website filing that that it extended its deadline to rule on the deal until July 9, a standard step following an offer of commitments. Vodafone said regulators will test the offer with rivals and customers. That feedback would allow the EU to either accept the package or negotiate further tweaks.
Vodafone now expects the European Commission "to adopt its decision on the transaction by July 2019, with completion occurring later that month,” the U.K.-based company said.
The EU has narrowed its focus to potential problems with the deal in Germany, people familiar with the transaction said last month. They are looking at the Vodafone-Liberty Global overlap in cable broadband services as well as the increased bargaining power that Vodafone would have in talks with broadcasters over media rights -- both issues that Vodafone aims to tackle with the Telefonica offer and an additional pledge made to the EU.
To appease broadcasters, Vodafone is promising sufficient network capacity for broadcasters to offer their own channels and content over the internet. This mimics Liberty Global’s concessions made in the Netherlands when it bought Ziggo. Those dedicated interconnection capacity for competing services and ended clauses that might have curbed broadcasters from offering so-called over-the-top services.
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