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Vodafone's $22 Billion Acquisition Of Liberty Cleared By EU

Vodafone's $22 Billion Acquisition Of Liberty Cleared By EU
The European Union has given the green signal to the $22 billion acquisition of Liberty Global’s cable networks in Germany and central Europe by Vodafone. This now removes most of the roadblocks for the British company to complete the acquisition that would make it the largest mobile, broadband and TV provider in the all of Europe.
Vodafone’s strategy of transforming itself from being just a pure mobile service provider into a big player in the market for providing of superfast broadband and pay-TV hinged a great deal on the passing of this acquisition by the regulators. The aim of Vodafone of implementing this new strategy, which was launched by its former CEO Vittorio Colao, is to provide impetus to consumers to spend more and to enhance consumer loyalty as it would now be providing a host of services through one window.
According to analysts, the deal was a an exit route for John Malone’s Liberty Global to reap rich returns from the sale of assets that are more valuable for a buyer who has the capacity to acquire them and then include them in a bundle of other services instead of a standalone service.
Following the granting of the green signal from the European Commission to allow for the merger of the two groups to form a new entity of networks that would be better positioned to rival the German market leader Deutsche Telekom, there was a 1 per cent increase in the stock prices of Vodafone – the second largest mobile operators of the world.
The Commission’s regulatory approval was however subject to fulfillment of proposed remedies aimed to make sure fair prices for consumers, continued high quality services and innovative products, said Commissioner Margrethe Vestager. “In our modern society access to affordable and good quality broadband and TV services is almost as asked for as running water,” she said.
The smaller rival of Vodafone, Telefonica Deutschland will have to be given access to Vodafone’s enlarged high-speed broadband network, according to the conditions of the approval from the Commission. Vodafone has agreed to the condition, the Commission said.
The concession that Vodafone will have to make was not enough to avoid limiting the variety of media and programming on offer to consumers, said Deutsche Telekom and added that it would appeal against the condition.
The deal has been described as transformational with respect to the four markets of Germany, Hungary, Czech Republic and Romania by Vodafone’s chief executive Nick Read. He said that consumers in these markets would now have access to high speeds and would encourage competition among the players in the markets.
“Vodafone transforms into Europe’s largest fully-converged communications operator, accelerating innovation through our gigabit networks and bringing greater benefits to millions of customers,” he said.
A powerful fixed-mobile challenger to national telecom incumbents would be presented by the new merged entity, Liberty said.

Christopher J. Mitchell

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