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Vodafone To Take Over Some Of Liberty’s European Assts For $21.8 Billion


05/09/2018


Vodafone To Take Over Some Of Liberty’s European Assts For $21.8 Billion
Vodafone would now be able to offer superfast cable TV, broadband and mobile in Europe after its taking over of Liberty Global’s assets in Germany, the Czech Republic, Hungary and Romania for a deal worth $21.8 billion. This will also help the company to take on its rivals in the region.
 
With the aim of being able to offer better competition to former monopolies such as Deutsche Telekom, Vodafone, the second-largest mobile operator in the world has been holding deliberations with John Malone’s Liberty since the last few years. Another aim for Vodafone was to make its offer for the business as lucrative as possible for John Malone’s Liberty. 
 
Vodafone will be able to cross sell a number of services to the customers in the region while also reducing costs of operations form the deal as it is set to gain access to over 54 million homes through its network of cable and fiber optis.
 
It was not long ago that Vodafone had completed a similar deal in Spain through its acquisition of the local cable operator Ono. This is however the biggest deal by the mobile and broadband serviced company in its history. The Spain deal has enabled the company to offer a single package with bundled offers to customers – such as telephony and internet, so that it is able to meet multiple demands of customers through just one package. 
 
“Vodafone will become Europe’s leading next generation network owner, serving the largest number of mobile customers and households across the EU,” Chief Executive Vittorio Colao said.
 
Following the completion of the deal, Vodafone would be able to integrate the operating costs by the fifth year while it would be able to save operational costs of about 535 million euros a year before that, Vodafone said. 
 
This is not the first time that the two companies – Vodafone and Liberty, have joined hands. Both the companies have a joint venture in Netherlands and that venture is not part of the new deal. Both the companies entered into a series of consultations February in relation to the proposed purchase of the assets of Liberty in the continental European countries other than Netherland where their services overlapped.
 
The Virgin Media network in Britain would be continued to be owned by Liberty.
 
There have however been concerns expressed by the rivals of Vodafone such as Deutsche which have argued that Vodafone would be able to gain an undue advantage in the market form the deal. Therefore, it is expected that the deal between Vodafone and Liberty will have to pass through a long process of regulatory approval process. 2019 has been set as a target for the completion of the deal by both the companies.
 
Under the agreement, if the deal does not get completed, the British company would be entitled to a break fee of 250 million euros from Vodafone.
 
(Source:www.reuters.com)