Consolidation in Dutch Cable Market As Liberty Global Makes $13.7 Billion Bid for Ziggo
Published on: 27th Jan 2014
Note -- this news article is more than a year old.
By: Ian Mansfield
Liberty Global is buying the Netherlands based cable and landline operator Ziggo in a cash and shares deal that values it at around EUR10 billion (USD13.7 billion).
Based on the past 10-days shareprice, that represents around a 38% premium over the company's market capitalisation. Liberty Global already owns a 28.5% stake in the company, which it bought last year.
In total, Liberty Global is paying EUR4.9 billion (USD6.7 billion) for the rest of the company, plus debt.
If the takeover is approved, then the combined business will provide approximately 10 million video, broadband internet and telephony services to over 4 million unique customers through a fiber cable network.
Liberty Global said that it will centralise its existing UPC branded Dutch operations at Ziggo's existing headquarters, and will adopt the Ziggo brandname for the local services.
Ziggo's Supervisory and Management Board are recommending the offer.
Mike Fries, Chief Executive Officer of Liberty Global, said: "Our combined operations will reach over 90% of all Dutch households allowing us to compete more effectively with the other national telecommunications and satellite platforms in the Netherlands, and at the same time generate significant revenue and operating efficiencies."
The company expects to generate EUR160 million in annual cost savings by 2018.
Based on the required steps and subject to the necessary approvals, Liberty Global and Ziggo anticipate that the Offer will close in the second half of 2014.
Deutsche Telekom's former CEO Rene Obermann, who took over as Ziggo's CEO only this month, will leave the company after the purchase is complete.