Deutsche Telekom has agreed to sell cable television assets to an investment partnership led by US-based Liberty Media Corp., the company announced Friday.
The partnership, a 50-50 joint venture of Liberty Media and unspecified investors brought together by London-based private equity firm Klesch & Company Ltd, has signed a letter of intent to acquire a 55-percent stake in six regional operating companies with an option to raise it to 75 percent minus one share.
"We plan to upgrade the cable networks and offer high speed Internet access, telephony and other services," said Gary Klesch, chairman of Klesch & Company, in an interview. "The network bandwith will go from 450 megahertz to 850 megahertz," he said. The bandwidth that the network can accommodate is a measure of how many TV channels or data it can carry over a a channel shared by all users.
The total number of cable connections in the regions, which include major cities like Berlin and Hamburg, is over 10 million, according to DT.
Klesch declined to comment on what amount the investment partnership is willing to spend on network upgrades. He also declined to give financial details of the deal. According to a report in The Wall Street Journal, however, the partnership agreed to pay over US$2 billion for the cable interests.
Liberty Media holds interests in various video programming, communications, technology, and Internet businesses worldwide. The company has a deal pending to become the biggest shareholder in Denver-based UnitedGlobalCom Inc., which in turn controls United Pan-European Communications NV (UPC), a large pan-European cable operator. UPC also offers broadband Internet services.
According to Klesch there are no plans to merge the German cable networks with any of UnitedGlobalCom's holdings.
The acquisition of the German cable interests is expected to close in mid-2001, DT said.
Deutsche Telekom, in Bonn, can be reached at +49-228-181-0 or at http://www.telekom.de/. Liberty Media, in Denver, can be contacted at +1-720-875-5400 or at http://www.libertymedia.com/. Klesch & Company can be contacted at +44-207-493-4300. UnitedGlobalCom, also in Denver, is at +1-303-770-4001 or at http://www.unitedglobal.com/.