Vodafone Paying $21.8 Billion to Buy Liberty Assets

Vodafone agreed to purchase the assets in Eastern Europe and Germany of Liberty Global for a price of $21.8 billion so it can battle with rivals with more range of superfast cable TV, mobile and broadband services.

The second largest mobile operator in the world entered into a deal with Liberty capital owned by John Malone the U.S. cable pioneer following years of talks that were on and off to become a leader that is able to challenge the dominance of prior monopolies like Deutsche Telekom.

The largest provider in Germany swiftly emphasized its opposition that it previously stated to this deal and Vodafone will likely face a long regulatory review by regulators in Brussels.

The companies penciled in the middle of 2019 at the completion date that also includes Hungary, Romania and the Czech Republic.

The deal increases Vodafone’s strength in its backyard of Europe where it has been battling to one of the players that has the scale to provide a complete range of communications and entertainment services that are wanted by consumers.

The trend explains as well why Liberty would be willing to leave markets like that where it does not own a complete range of services.

Vodafone CEO Vittorio Colao said that the transactions would create the first converged pan-European competition champion.

Vodafone shares traded higher in Wednesday morning trading in Europe by almost 1.4%.

Colao said that the deal would not lower consumer choice because there is not any overlap between the existing cable network of Vodafone Kabel Deutschland and Unite Media of Liberty.

However, Deutsche Telekom the largest telecoms company in Europe has argued that the deal distorts competition across Germany.

CEO of Liberty Mike Fries said that he was confident the deal would get approved and that even when the two are combined, Vodafone and Liberty only are about 50% the size of Germany’s Deutsche.

In this deal, the British company has agreed to give Liberty cash in the amount of $12.7 billion and accept associated debt to create a network across Europe that covers over 54 million homes.

The move represents the biggest deal for Vodafone since it left the U.S. in 2014. Liberty will stay in Britain, Ireland, Belgium, Poland, Slovakia and Switzerland.

Analysts speculate the two companies could make a similar type deal in Britain, were Virgin Media is owned by Liberty, but Colao said it was not on the company agenda.

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