Vodafone dials up £16bn deal
VODAFONE is to buy US cable giant Liberty Global’s networks in Germany and eastern Europe for £16billion.
The acquisition of assets from Virgin Media owner Liberty in the Czech Republic, Hungary and Romania as well as in Germany will help transform the mobile operator into a cable and broadband TV player across the Continent.
After the deal, which needs to be cleared by regulators, Vodafone will become the leading nextgeneration network owner in Europe, with 54 million cable TV and broadband customers.
Liberty’s disposal has also reignited speculation it could bid for UK broadcaster ITV, in which it holds a 10 per cent stake.
Telecoms companies are striving to provide a full range of entertainment and communications services for consumers.
Vodafone chief executive Vittorio Colao, pictured, said: “The transaction will create the first truly converged pan-European champion of competition.
“It represents a step change in Europe’s transition to a gigabit society and a transformative combination for Vodafone that will generate significant value for shareholders.
“We are committed to accelerating and deepening investment in nextgeneration mobile and fixed networks, building on our track record of ensuring that customers benefit from the choice of a strong and sustainable challenger to dominant incumbent operators.
“Vodafone will become Europe’s leading next-generation network owner, serving the largest number of mobile customers and households across the EU.”
He denied the deal would reduce choice because there is no overlap between Vodafone’s Kabel Deutschland and Liberty’s Unity Media cable network.
Colao said a move for Virgin Media was “not on the agenda for the time being”, adding: “We are very happy with the current solution of both reselling BT’s lines and working with City Fibre.”
Vodafone is targeting annual savings of about ¤535million (£468million) by the fifth year, with cross-selling opportunities boosting revenues by ¤1.5billion.
Liberty chief executive Mike Fries said: “Europe needs strong competition from scaled national challengers willing and able to invest in next-generation wireless, video and broadband services.”