The European Commission has cleared the proposed acquisition of Virgin Media by Liberty Global under the EU Merger Regulation.
In a statement, it says that the transaction, worth €17.2 billion, “would not raise competition concerns, in particular because the parties operate cable networks in different Member States and because of the merged entity’s limited market position in the wholesale of TV channels in the UK and Ireland.”
The Commission says it examined, in particular, the market for the acquisition of TV content in the UK, Ireland and European Economic Area (EEA) as whole and concluded that “the proposed acquisition would not restrict competition in these markets because TV content is licensed mainly on a national basis or for linguistically homogeneous areas and because the merged entity would still face sufficient competitive constraint from other players, such as TV content providers and competing pay-TV retailers”.
Significantly, it also “investigated the vertical link between Liberty Global’s activities in the wholesale supply of pay-TV channels (e.g. Extreme Sports Channel, CBS Reality, Horror Channel, etc.) and Virgin Media’s activities in the acquisition of these channels and the retail of pay-TV services to customers in the UK.
The Commission concluded that “the merged entity is unlikely to shut out competing pay-TV retailers by withholding its TV channels from them, given its very limited presence in the wholesale supply of TV channels and the incentive to license its TV channels as broadly as possible.
“Similarly, it is unlikely that the merged entity would shut out competing TV channel broadcasters from access to the retail pay-TV market, given the number of alternative distribution platforms to Virgin Media’s cable network (e.g. BSkyB’s satellite platform) and the importance of offering a large variety of TV channels in order to attract pay-TV subscribers.”
The Commission was notified of the proposed deal on March 6.
