09 May 2018
| Natalie Bannerman
Liberty Global has entered into a definitive agreement to sell its operations in Germany, Hungary, Romania and the Czech Republic to Vodafone Group for $22.7 billion.
Once completed Liberty Global will still remain one of
Europe’s leading cable television and broadband
provider, with operations in the UK, Ireland, Belgium,
Switzerland, Poland and Slovakia.
"The transaction appropriately values our core cable
operations at a double digit OCF multiple and will deliver
$12.7 billion of estimated cash proceeds to Liberty Global,"
said Mike Fries, chief executive officer of Liberty Global.
"Plus, we will retain all cash generated from the four
businesses through closing. In Germany alone, which we value at
12 times 2017 adjusted segment OCF, we will have generated over
six times our original investment, supported by exceptional
operating performance over the last seven years during which we
grew revenue 60% and OCF 82%."
The four businesses represent approximately 28% of Liberty
Global’s consolidated 2017 operating cash flow and
Vodafone is said to be acquiring Liberty’s German
business inclusive of its debt.
"This is also an important and exciting transaction for our
customers and employees," continued Fries. "In each of these
markets, the combination of Liberty Global and
Vodafone’s businesses will transform the
competitive landscape and bring a new level of convergence to
customers. Now more than ever, Europe needs strong competition
from scaled national challengers willing and able to invest in
next-generation wireless, video and broadband services.
Upon closing a change of control will occur with respect to
Unitymedia’s debt, at which time lenders and
bondholders will have the option to put their debt to
"Germany, for example, is dominated by one provider that
controls over half the broadband market. As a result,
innovation and investment lag other countries in Europe,
impacting customer service, next-generation product deployment
and broadband speeds. Even together, Liberty Global and
Vodafone, whose cable networks don’t compete or
overlap, will be half the size of the incumbent operator.
It’s time to alter market dynamics by unleashing
greater investment and competition."
In addition, Liberty Global will continue to provide certain
transitional services for a period of up to four years after
the transaction. These services will be largely network and
information technology-related functions.
The transaction will be reviewed by the European Commission
for regulatory approval, which is expected to happen in