Tele Columbus to buy PrimaCom
German cable network operator Tele Columbus is to acquire PrimaCom for €711 million ($778 million), in a move which will combine the country’s third and fourth largest cable companies.
The combined entity of two rivals will now sit as the country’s third largest cable company behind Kabel Deutschland and Unitymedia.
“This is a transformational transaction for Tele Columbus, strengthening our position as the number three player in the German cable market,” Ronny Verhelst, chief executive at the company, said in a statement on Thursday.
PrimaCom operates its own fibre optic network in Germany, supplying telecoms and TV service to 1.2 million homes. The merged firm will serve approximately 2.8 million homes, with a focus on eastern Germany, as well as western regions including Baden-Wuerttemnberg, Hamburg, Hesse and North Rhine-Westphalia.
Tele Columbus floated on the stock exchange earlier this year – in a bid to refinance its debt – and has said it will finance the acquisition through a combination of cash, a fully underwritten debt package and a €125 million bridge loan.
The company has said it will launch a rights issue, as potentially other equity measures, in the second half of the year to repay its debt.
Tele Columbus said that the transaction does not need regulatory approval and is not subject to merger control review. The deal is due to complete on July 31.