Vodafone scoops up Liberty Global European assets in £16bn deal

Leroy Wright
May 10, 2018

Vodafone said in February it was in talks about buying Liberty's assets in the continental European countries where they overlap: Germany, Czech Republic, Hungary and Romania.

The challenge in Germany, where Deutsche Telekom is investing in the build-out of fiber lines, is to win wireless and business clients in the face of competition from a combined Vodafone and Liberty Global, Telefonica SA and United Internet AG, which is emerging as a fourth large telecom carrier.

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", said Vodafone CEO Vittorio Colao in a statement. "It represents a step change in Europe's transition to a gigabit society. Vodafone will become Europe's leading next generation entwork owner, serving the largest number of mobile customers and households across the European Union".

This will leave Liberty with cable TV and broadband operations in the UK, Ireland, Belgium, Switzerland, Poland and Slovakia, following its recent €1.9 billion sale of UPC Austria to T-Mobile. With operation, Vodafone, which is strong in those regions in mobile telephony, acquires above all a large park of clients of fixed broadband and cable television now in hands of American Liberty. Given the impact this transaction would have on competition, blanket approval of the deal by regulators would be "questionable", said Breko.

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Vodafone now offers only mobile telecoms services in Hungary, Romania and the Czech Republic. "This is one of those moments". The company has also said it aims to bring gigabit connections to 25 million households in Germany by 2025, hitting its biggest continental rival, Deutsche Telekom, in its home market. His own company was forced to divest from its cable TV business on the grounds of antitrust concerns during the liberalization of the German telecommunications market in the 1990s. Liberty Global CEO Mike Fries said on Wednesday that even together, Liberty Global and Vodafone will be half the size of Deutsche Telekom and that the merger will be decided by the European Commission. The combination of these complementary cable networks does not, therefore, reduce customer choice for TV or broadband.

If approved by competition watchdogs in Brussels, the acquisition of Liberty Global assets in Germany, the Czech Republic, Hungary and Romania, will catapult Vodafone to.

Vodafone has also agreed to a €250m break fee, which would be payable to Liberty Global if the acquisition does not go ahead.

Vodafone anticipates that completion will take place around the middle of calendar 2019.

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