EU finds few major hurdles in Germany from Vodafone-Liberty deal: sources

By Foo Yun Chee and Paul Sandle

BRUSSELS-LONDON (Reuters) - The European Union has not raised any major concerns about the impact of Vodafone's buying Liberty Global's assets on the cable market in Germany, sources with direct knowledge of the matter said on Tuesday.

Vodafone, the world's second biggest mobile operator, agreed in May to pay $22 billion for Liberty Global's cable networks in Germany and eastern European markets to challenge the dominance of former monopolies like Deutsche Telekom.

In December, the EU opened a full-scale probe into the deal, which has been strongly criticised by rivals DT and Telefonica Deutschland .

Antitrust regulators said at the time they were concerned the deal would damage competition in Germany and the Czech Republic.

Two sources, however, said the EU had accepted that Vodafone's Kabel Deutschland and Liberty's Unitymedia cable networks, which serve different regions of Germany, were unlikely to ever overlap and therefore competition would not be reduced if they combined.

"That is no longer on the table," one of the sources said.

The sources also said there was no major EU concern about the impact on fixed line-mobile convergence in the Czech Republic.

Vodafone said in a statement it was continuing its constructive dialogue with the European Commission about the deal, which also includes operations in Hungary and Romania.

Liberty Global was not immediately available to comment.

(Additional reporting by Douglas Busvine in Frankfurt. Editing by Jane Merriman and Georgina Prodhan)