Vodafone has snapped up US cable giant Liberty Global’s operations in Germany, the Czech Republic, Hungary and Romania in a £16.1billion deal.
The deal, which faces a regulatory approval process, means Vodafone will be able to expand its broadband, mobile and cable television services across Europe.
Looking ahead, FTSE 100 listed Vodafone said the deal will help it reach 110million homes and businesses.
Deal: Vodafone has snapped up US cable giant Liberty Global’s operations in Germany, the Czech Republic, Hungary and Romania
Liberty Global owns Virgin Media, which it plans to retain, as well as its operation in Ireland.
Vodafone’s share price is up 1.35 per cent or 2.80p to 210.35p.
The deal will comprise of £9.5billion paid to Liberty Global and £6.7billion of existing Liberty Global debt.
Cost and capital expenditure synergies are expected to total around £469million per year, before integration costs, by the fifth year. Vodafone expects to close the deal by the middle of next year.
Vittorio Colao, Vodafone’s chief executive, said: ‘This transaction will create the first truly converged pan-European champion of competition.’
He added: ‘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.’
Vodafone said it ‘looks forward to bringing together the leading talent in the sector in all four countries.’
Management and employees from Liberty Global ‘will have the opportunity to play an integral role within the combined company in each country’, Vodafone said.
Share price reaction: Vodafone’s share price is up 1.35 per cent or 2.80p to 210.35p
Vodafone’s deal with Liberty Global strengthens the former’s hand as it vies for dominance with telecoms powerhouse Deutsche Telekom. Both companies are trying to consolidate telecoms networks that span the continent.
Vodafone has already struck cable deals in Britain, Germany and Spain, while Deutsche Telekom, which is 32 per cent owned by the German state, is the largest shareholder of BT and controls assets in several European countries, stretching from the Netherlands to Greece.
Liberty Global, which is controlled by John Malone, the so-called ‘cable cowboy’, is reportedly keen to quit the market because it believes it has become fragmented.
Analysts have suggested Vodafone’s chance of success depends on whether competition officials in Germany or the EU rule on the deal, with regulators in Brussels thought to be more likely to approve it.