Operators agree to merge assets in the Netherlands weeks after reopening negotiations
Vodafone Group has reached an agreement with Virgin Media owner Liberty Global to merge their Dutch assets.
The UK-based operator will pay Liberty around £770 million to “equalise ownership in the joint venture”, it said in a statement.
The deal will bring together Liberty’s Ziggo broadband operation with Vodafone’s mobile assets to create a company with more than 15 million “revenue generating units”, including set top boxes, mobile connections, broadband and fixed line customers.
The deal is expected to be completed later this year and the two companies claim it will create around ‚¬3.5 billion worth of synergies, with ‚¬350 million integration costs.
“The combination of Vodafone’s leading mobile business with Ziggo’s successful broadband and TV business creates a strong and competitive integrated communications player, which will invest in digital infrastructure, entertainment services and productivity applications for Dutch consumer, business and public sector customers,” said Vodafone Group chief executive Vittorio Colao.
“Together we will be a stronger competitor in the Netherlands, benefiting customers of both companies and the market as a whole. This transaction marks a continuation of Vodafone’s market-by-market convergence strategy and we look forward to partnering with Liberty Global to create a fully integrated provider in one of our core European markets.”
The board of the combined entity is expected to be comprised of three representatives from Vodafone and three from Liberty Global.
The agreement comes just weeks after Vodafone reopened talks with Liberty Global, after negotiations about a swapping of assets broke down in September. The two telecoms giants had been discussing the possibility of combining assets in the UK, Germany and other European markets.
Liberty, which is owned by US tycoon John Malone, previously said an agreement with Vodafone “made sense” in some markets.
Liberty Global chief executive Mike Fries said: “This powerful combination of the best fixed and mobile networks in the Netherlands will deliver huge benefits to Dutch consumers and businesses. Throughout Europe, Liberty is capitalizing on the rising demand for lightning-fast broadband speeds, the coolest digital TV platforms and apps, and seamless 4G wireless connectivity.
“Soon, both Ziggo and Vodafone customers in the Netherlands will be at the forefront of this new world, and we couldn’t be more excited about our partnership with Vodafone. We look forward to working together to develop cutting-edge converged services for the Dutch market.”