BERLIN — U.S./Dutch cable provider United Pan-Europe Communication (UPC) has confirmed it is negotiating for a possible stake in German cabler Primacom, but refused to comment on the possibility of a merger.
According to Tuesday’s London Financial Times, the two companies could establish a joint venture including UPC’s Teutonic subsidiary EWT/TSS as well as some of its Dutch operations. Entity would be Germany’s second largest cable company.
Deal has been approved by the boards of both companies, according to the newspaper.
Move comes as no surprise, since Primacom confirmed last year that it was considering a possible merger with UPC, which would probably control 50% of the new company. The joint subsidiary would have roughly 2.3 million subscribers.
Primacom exec VP Alexander Hoffmann said talks have been going on for 15 months. “We have always said it would make sense to merge our cable activities,” he said.
UPC, which already owns 25% of Primacom, is keen on having a listed company in Germany; UPC has acquired a number of cable networks from Deutsche Telekom that need upgrading, and it could raise the needed money via the Neuer Markt-listed company.
Primacom shares saw a boost of nearly 16% to 17.03 euros ($15.24) Tuesday afternoon following press reports of the possible merger, and ended the day at $14.51.
Company has roughly 1.3 million customers in Europe, with a million of those in Germany.
Deal comes as Liberty Media, which controls UPC parent company UnitedGlobalCom, also establishes a foothold in Germany. Last month, the U.S. media group, in a joint venture with the U.K.’s Klesch & Co., took stakes in six of the nine regional cable systems sold by Deutsche Telekom. Those operations are expected to remain separate from UPC’s own activities.