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Global Insight
August 10, 2006
By Eva Bakowicz
From Lexis Nexis

U.S. cable-TV group Liberty Global has acquired Czech cable operator Karneval for a total of approximately 322.5 million euro (US$414.4 million).

The merger will be completed by the year-end. Karneval offers cable TV and broadband services to residential customers, and had about 310,000 subscribers at the end of June.

Significance: Liberty Global will take over Karneval through its Czech cable unit, UPC Czech Republic. The move marks a trend of consolidation in the Czech broadband cable market, as well as Liberty Global's fresh expansion plans in Central and Eastern Europe (CEE).

Earlier this month, Liberty Global's Romanian unit, UPC Romania, merged with rival Astral Telecom (see Romania: 2 August 2006: ). Liberty Global posted a 46% increase in its second-quarter revenue, on strong growth in its customer base.

The group added 363,000 net new subscribers in the April-June period. It also reduced its sales targets for the full year, on the back of the disposals of operations in Sweden and France.

The company cut its annual customer forecast to 1.4 million from a previously forecast 1.6 million. Revenue is expected to come in at US$6.2 billion with operating cash flow at US$2.2 billion (against previous projections of US$6.8 billion and US$2.4 billion respectively).

Liberty Global sold its French unit, UPC France, to Cinven and rival cableco Altice for about 1.25 billion euro in March this year. The following month, it disposed of its Swedish cable operations, UPC Sweden, for US$427 million; a U.S. private-equity consortium comprising Carlyle Group and Providence Equity Partners (PEP) acquired the player.