Telco Vodafone Pays $21.7B For Liberty Global Assets In Europe

Gladys Abbott
May 10, 2018

The world's second-largest mobile operator Vodafone has entered into a deal to acquire the German and East European operations of USA cable pioneer John Malone's Liberty Global for €18.4 billion ($21.8 billion), in a bid to expand into these markets with a broader range of superfast cable TV, broadband and mobile services.

The move will see the United Kingdom telco buy businesses in Germany, Hungary, Romania and the Czech Republic and will see it bolster its cable TV, broadband internet and mobile services in the region. The acquisition will, according to Vodafone, make the operator the leading "next generation network" owner in Europe, with 54m cable/fibre homes "on-net" and a total reach of 110m homes and businesses, including wholesale arrangements.

However, Vodafone chief executive Vittorio Colao said on Wednesday that the deal "creates a strong competitor to Deutsche".

Following the deal, London-listed Vodafone would be serving the largest number of mobile customers and households across the EU.

Vodafone said that in Germany, where the purchase of Liberty's UnityMedia gives it the ability to address 13 million homes and 7.2 million existing customers, it could now mount a credible challenge to the dominant incumbent provider.

"The combination of Vodafone and Unitymedia's nonoverlapping regional operations will establish a strong second national provider of digital infrastructure in the German market", the British telecom added. The company said it would reveal more in due course, but it would help "optimize growth and shareholder returns".

More news: NBA Playoffs 2018: Chris Paul Determined To Win First NBA Championship Title

Mike Fries, chief executive officer of Liberty Global, said: "This is an important and exciting transaction for our customers and employees".

Liberty will remain in Britain, Ireland, Switzerland, Belgium, Poland and Slovakia. "I don't believe that Germany wants to go into a situation like Eastern European markets, where TV markets are dominated by telco players". It acquired Kabel Deutschland in 2013 and then bought Spanish cable player ONO a year later.

It is possible that the acquisition of Liberty Global's operations in these countries will allow Vodafone to compete against dominant, local telecommunications firms, such as Deutsche Telekom. Together, these cable systems reach have 26 million video, broadband and wireline telephone subscribers, as well as 6 million mobile customers.

The combined company will be able to offer interactive TV services, broadband internet and fixed-line telephony services, as well as mobile to Vodafone Romania's 9.9 million mobile customers and UPC Romania's 2.1 million fixed revenue generating units.

The transaction is subject to regulatory approval, with completion anticipated around the middle of 2019.

In the event that the deal does not close, a break fee of €250 million will be payable by Vodafone in certain circumstances.

Other reports by LeisureTravelAid

Discuss This Article