Vodafone strikes €18.4bn deal for Liberty Global’s European operations

BY Fraser Tennant

In an €18.4bn deal which expands its mobile, TV and broadband services in Europe, multinational telecommunications conglomerate Vodafone has agreed to acquire US firm Liberty Global’s operations in Germany, the Czech Republic, Hungary and Romania.

The total enterprise value of the transaction is expected to comprise approximately €10.8bn of cash consideration paid to Liberty Global and €7.6bn of existing Liberty debt, subject to completion adjustments. Once complete, Vodafone will become the leading next generation network (NGN) owner in Europe, with 54 million cable/fibre homes ‘on-net’ and a total NGN reach of 110 million homes and businesses.

In Germany, the combination of Vodafone and Unitymedia (which runs Liberty Global's operations in Germany as well as being the country’s second largest cable operator) will bring Gigabit connections to around 25 million German households by 2022. In Central and Eastern European (CEE) markets, the transaction will accelerate the availability of converged fixed, mobile and TV services.

“This transaction will create the first truly converged pan-European champion of competition,” said Vodafone Group chief executive Vittorio Colao. “It represents a step change in Europe’s transition to a Gigabit Society and a transformative combination for Vodafone. We are committed to accelerating and deepening investment in next generation mobile and fixed networks, building on Vodafone’s track record of ensuring that customers benefit from the choice of a strong and sustainable challenger to dominant incumbent operators.”

Vodafone has also said that management and employees of the acquired Liberty Global businesses will have the opportunity to play an integral role within the combined company in each country and across the wider Vodafone Group.

“We have a rich history at Liberty Global of successfully developing and reshaping our business to drive innovation, advance customer services and create significant value for shareholders,” said Mike Fries, chief executive of Liberty Global. “This is one of those moments. Now more than ever, Europe needs strong competition from scaled national challengers willing and able to invest in next-generation wireless, video and broadband services.”

The Vodafone/Liberty Global transaction is subject to regulatory approval by the European Commission and is anticipated to be completed in mid-2019.

Mr Fries added: “This is also an important and exciting transaction for our customers and employees. In each of these markets, the combination of Liberty Global and Vodafone’s businesses will transform the competitive landscape and bring a new level of convergence to customers.”

News: Vodafone makes €18bn swoop on Liberty Global cable networks

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