Vodafone agrees €7.7 billion deal for Kabel Deutschland

24 June 2013 | Kavit Majithia


UK-group Vodafone has today agreed a €7.7 billion deal to acquire Kabel Deutschland.

Reports of Vodafone’s interest in the company emerged earlier this year, and after a small bidding war with US cable operator Liberty Global, it appears Vodafone has won the support of Kabel Deutschland's shareholders.

The offer values Kabel Deutschland at €87 per share, and pays out a €2.50 dividend to shareholders, representing a small premium on the company’s closing price on Friday.

As part of the offer, Vodafone will take on €3 billion in net debt, and increases the proposed enterprise value of the deal to €10.7 billion.

The company was valued at €5 billion in an IPO in 2010, and is now Germany’s largest cable provider of TV, telephony and broadband services.

Liberty Global launched a rivaling offer for Kabel Deutschland last week valued at approximately €85 per share, comprising of a bid of over €7.5 billion.

Vodafone is looking to beef up its operations across Europe to offer a bundled telecoms, broadband and TV services, with the company also looking to partner with cable groups around European markets to move away from its pure-play offering.

Vittorio Colao, chief executive at Vodafone said: “The combination of Vodafone Germany and Kabel Deutschland will greatly enhance our offerings in response to those needs and is consistent with Vodafone’s broader strategy of providing unified communications services.”

Kabel Deutschland also welcomed the bid and said that they “believe a future combination with Vodafone promises highly attractive long-term benefits for both companies, their customers, workforces and shareholders”.