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By Harro Ten Wolde and Peter Maushagen
FRANKFURT (Reuters) - European cable operator Liberty Global's (O:LBTYA) German unit has reached an agreement with two companies which objected to its 3 billion euro (2 billion pound) purchase of cable provider KabelBW, by paying them 183.5 million euros.
A regional court in Duesseldorf ruled in 2013 that the cartel office must re-examine the case to either block it or force the firms to offer more concessions to protect competition in the cable television market.
The ruling ultimately could have led to the unwinding of a merger that bolstered Germany's second-largest cable operator Unitymedia, owned by Liberty Global, Europe's largest cable operator, in 2012.
Germany's biggest telecoms group Deutsche Telekom (DE:DTEGn) and local cable operator NetCologne had challenged the approval.
Unitymedia said on Friday that the two companies had withdrawn their objections against the deal. The German competition regulator confirmed it had approved the settlement.
Liberty Global said in a regulatory filing with the United States Securities and Exchange Commission that it had promised to pay Deutsche Telekom and NetCologne "an aggregate amount of 183.5 million euros."
Liberty Global's Chief Executive Mike Fries told a conference call with analysts on Friday that he considered the payment to be "small and marginal".
"We consider the payment as not material for an operation which has way outperformed expectations," he added.
Liberty expects that legal proceedings will be formally terminated during the current quarter.
Shares in Liberty Global shares were trading 2.5 percent higher at $51.05 by 1450 GMT in New York.
Deutsche Telekom has been hard hit by the success of Unitymedia KabelBW and Kabel Deutschland (DE:KD8Gn), which is now part of Vodafone (L:VOD).
Both cable companies have snatched customers from established telecoms players such as Deutsche Telekom, with their upgraded networks offering home and office Internet at speeds that are often five times faster.
The cartel office had approved the acquisition at the end of 2011 only after imposing far-reaching remedies because Liberty already owned Unitymedia, which then absorbed KabelBW.
Sources told Reuters last year that pressure from competition regulators could prompt Liberty Global to abandon Germany if it can no longer pursue its growth ambitions in Europe's biggest cable market.