Vodafone reboots equity-neutral mando for Liberty Global buy

10 May, 2018, 00:31 | Author: Rachel Logan
  • John Malone chairman of Liberty Global

The FTSE-100 listed mobiles telecoms giant is acquiring operations in four European countries - Germany, Czech Republic, Hungary and Romania - from USA cables giant Liberty Global for an enterprise value of €18.4bn.

Vodafone Group PLC is now in an agreement to buy Liberty Global's businesses in four European countries in a deal worth almost $23 billion, a merger set to create one of the largest telecommunications carriers in the continent.

Under the terms of the deal, Vodafone will gain access to roughly 54 million homes with cable and fiber subscriptions and will reach a total of 110 million residencies including homes, businesses, and wholesalers.

"This transaction will create the first truly converged pan-European champion of competition", remarked Vodafone group chief executive Vittorio Colao.

"It is also a transformative combination for Vodafone, we will become the leading next-generation network owner in Europe, serving the largest number of mobile customers and households across the European Union".

"Vodafone will become Europe's leading next-generation network owner, serving the largest number of mobile customers and households across the European Union", added Colao.

The analyst thinks the United Kingdom "may be in his sights", with Liberty Global - already the owner of cable broadband provider Virgin Media - owning a big stake in commercial broadcaster ITV plc (LON:ITV).

American cable giant Liberty Global, which also is the owner of Virgin Media, has agreed to sell most of its European assets to Vodafone.

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The deal will allow Vodafone to expand its mobile, cable television and broadband services across Europe. "This is one of those moments". This means that the combination of Vodafone Romania and UPC Romania will enable the customers of both companies to access a converged bundle of mobile, broadband, and TV, as well as enterprise services.

Mr Colao said that there was "no geographical overlap" between the two businesses.

The German broadband association Breko also said it "feared" the merger would lead to a reduction in competition at the expense of consumers and other firms, noting that households in many parts of Germany already have little if any choice for broadband or TV providers.

In the UK, Vodafone uses a combination of the Cable and Wireless network it acquired in 2012 and a wholesale agreement with Openreach to deliver its broadband services.

The deal for assets of the U.S. group would see Vodafone become the second-biggest player in eurozone powerhouse Germany, while it would also acquire operations in the Czech Republic, Hungary and Romania, it said in a statement.

A breakup fee of €250 million, payable by Vodafone, has been agreed should the purchase fail.

The Transaction is not subject to Vodafone or Liberty Global shareholder approvals.

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