- POSTED: 27 Jan 2014 18:37
US cable giant Liberty Global is to buy Dutch operator Ziggo in a deal valuing the company at 10 billion euros ($13.7 billion), as it marches further into strategic European markets.
THE HAGUE: US cable giant Liberty Global is to buy Dutch operator Ziggo in a deal valuing the company at 10 billion euros ($13.7 billion), as it marches further into strategic European markets.
The stock and cash offer implies a price of 34.53 euros per share, both companies said in a statement on Monday, and comes after Ziggo in October rejected a bid from Liberty Global as too low.
"Our combined operations will reach over 90 percent 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," said Liberty Global's chief executive Mike Fries.
The companies hope that the deal will save them 160 million euros a year in running costs by 2018 "which will underpin our growth profile over the next few years in the Netherlands and for Liberty Global overall, as we continue to build scale in Western Europe," he said.
Liberty Global, controlled by tycoon John Malone, already operates in the Netherlands through Ziggo competitor UPC and last year bought 28.5 percent of Ziggo.
The merged company will trade as Ziggo and be based at the same headquarters in central city Utrecht.
The acquisition is the latest by Colorado-based Liberty Global in Europe after it last year bought Virgin Media in a merger valued at $23.3 billion.
That mega-deal covered 47 million homes and served 25 million customers in 14 countries.
The purchase of Ziggo gives access to seven million Dutch homes, providing 10 million video, broadband internet and telephony services to over four million customers, the statement said.
"With approximately 2.5 billion euros in total revenue, the combined company will be a leading provider of communication services across the Netherlands," the companies said.
The deal was "unanimously recommended by Ziggo's Supervisory and Management Boards, having concluded the transaction is in the best interests of Ziggo and its stakeholders, including its shareholders," they said.
"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."
Now active in 13 countries, including 11 in Europe, Liberty bought Unitymedia and Kabel BW, the number two and three German cable operators respectively, in 2010 and 2011.
Liberty said last year that it had abandoned an initial public offering for the Belgian company Telenet after being able to attract only 58.3 percent of the capital.