In a deal worth 19 billion euros ($22.7 billion), Vodafone is acquiring Liberty Global’s operations in Germany, Hungary, Romania and the Czech Republic.
With the deal, Vodafone takes control of Unitymedia, the second-largest cable operator in Germany with 7.2 million customers; and UPC Czech, UPC Hungary and UPC Romania, which service 2.4 million unique customers.
“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 that will generate significant value for shareholders. 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 will become Europe’s leading next generation network owner, serving the largest number of mobile customers and households across the EU.”
Mike Fries, CEO of Liberty Global, commented, “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. This is one of those moments. 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. 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. Germany, for example, is dominated by one provider that controls over half the broadband market. As a result, innovation and investment lag other countries in Europe, impacting customer service, next-generation product deployment and broadband speeds. Even together, Liberty Global and Vodafone, whose cable networks don’t compete or overlap, will be half the size of the incumbent operator. It’s time to alter market dynamics by unleashing greater investment and competition.”
The deal requires regulatory approval by the European Commission, which is expected by the middle of next year.
Once complete, Liberty Global will remain the region’s largest cable TV and broadband provider with its assets in the U.K., Ireland, Belgium, Switzerland, Poland and Slovakia reaching 24 million homes. The company also owns half of VodafoneZiggo in the Netherlands, which has 4 million customers. Vodafone says the transaction will turn it into Europe’s “leading next generation network owner,” with 54 million cable/fiber homes ‘on-net’ and a total reach of 110 million homes and businesses.