Vodafone and Liberty Global announce Dutch tie-up
Vodafone will combine its mobile operations in the Netherlands with Liberty’s Ziggo broadband network
Published 16/02/2016 | 07:19
Vodafone has agreed a deal with US cable giant Liberty Global to merge their Dutch operations.
The UK mobile giant will pay Liberty, owned by billionaire John Malone, €1bn (£770m) to “equalize ownership in the joint venture”, according to a statement released on Monday night.
Combining Liberty’s Ziggo broadband network with Vodafone’s mobile operations in the Netherlands, will create a company with more than 15m “revenue generating units” - set-top boxes, internet access, and landline and mobile connections.
The pair estimate total cost and revenue synergies of €3.5bn when the deal completes at the end of the year. They predict €350m of integration costs.
Vodafone’s Netherlands unit unveiled revenues of nearly €2bn last year, while earnings before interest, taxes, depreciation and amortization hit €643m.
Ziggo’s revenues came in at nearly €2.5bn, while operating cash flow was €1.4bn.
“The combination of Vodafone’s leading mobile business with Ziggo’s successful broadband and TV business creates a strong and competitive integrated communications player, which will invest in digital infrastructure, entertainment services and productivity applications for Dutch consumer, business and public sector customers," said Vittorio Colao, Vodafone’s chief executive, said. “Together we will be a stronger competitor in the Netherlands, benefiting customers of both companies and the market as a whole. This transaction marks a continuation of Vodafone’s market-by-market convergence strategy and we look forward to partnering with Liberty Global to create a fully integrated provider in one of our core European markets.”
Mike Fries, chief executive of Liberty Global, said: “This powerful combination of the best fixed and mobile networks in the Netherlands will deliver huge benefits to Dutch consumers and businesses. Throughout Europe, Liberty is capitalizing on the rising demand for lightning-fast broadband speeds, the coolest digital TV platforms and apps, and seamless 4G wireless connectivity. Soon, both Ziggo and Vodafone customers in the Netherlands will be at the forefront of this new world, and we couldn't be more excited about our partnership with Vodafone. We look forward to working together to develop cutting-edge converged services for the Dutch market.”
The board of the joint venture is expected to be comprised of three representatives from each of Liberty Global and Vodafone.
The tie-up comes just weeks after the Vodafone and Liberty Global restarted talks.
The pair had previously mooted a series of asset swaps or even an outright merger but those talks ended in September.
They scrapped deliberations over combining their mobile and cable networks in the British, German and other European markets when months of talks yielded little progress.