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Vodafone confirms Liberty Global Netherlands talks

Responding to heightened media speculation, Vodafone has confirmed it is in discussions with cable MSO Liberty Global (LG) regarding the creation of a joint venture in the Netherlands that would incorporate both companies’ local operating businesses. The telco says discussions are ongoing and do not extend beyond the creation of a joint venture in the Netherlands.

“There is no certainty as to when or whether any transaction will be agreed,” says Vodafone.

The talks are likely to centre on LG’s Dutch cable operation Ziggo. Any alliance between Ziggo and Vodafone would create a strong competitor for dominant telco KPN, with Vodafone ranked number two in the Dutch mobile phone market and Ziggo’s cable network covering 90 per cent of the Netherlands.

Vodafone confirmed late September 2015 that discussions with Liberty Global regarding a possible exchange of selected assets between the two companies had terminated. The pair revealed on June 5th that they were in the early stages of such talks.

At the time, the suggestion was that discussions were looking at a broader tie up in Western Europe, with Liberty Global’s chairman John Malone suggesting in May 2015 that such a tie-up would be a “great fit”.

“We’ve looked at that from our side and there would be very substantial synergies if we could find a way to work together or combine the companies,” he told Bloomberg.

UK cable MSO Virgin Media, acquired by Liberty Global in February 2013 for $23.3 billion, had been seen as a prime target for Vodafone as it attempted to develop a quad-play offering better to compete with BT and Sky in the UK, but attention would now seem to be turning to the Netherlands.

Any deal involving would follow Vodafone’s earlier cable MSO acquisitions, buying Kabel Deutschland in June 2013 for €7.7 billion, and Spanish cabler ONO in mid-March 2014 for €7.2 billion.

LG acquired Ziggo in a stock and cash transaction valuing Ziggo at approximately €10 billion, completing the deal in October 2014.

According to the pair, the deal had strong industrial logic with significant benefits for all stakeholders:

  • Reaching 7 million or over 90 per cent of Dutch homes, the combined business will provide approximately 10 million video, broadband Internet and telephony services to over 4 million unique customers through a fibre-rich cable network. With approximately €2.5 billion in total revenue, the combined company will be a leading provider of communication services across the Netherlands.
  • Creates leading challenger in the mobile and enterprise businesses with the emergence of a nationwide cable operator, further ensuring sustainable competition throughout the Netherlands, benefiting the Dutch economy and society as a whole.

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