With a goal of expanding it’s Mobile, TV and broadband services in Germany and Eastern Europe, Vodafone has knocked a deal of €18.4bn with the US Firm, Liberty Global cable networks.
Formerly Vodafone was offering only mobile services in Czech Republic, Hungary and Romania, and now this deal will enable them to expand into TV & Broadband services. After taking over operations in these regions, it expects to have 54 million cable TV and Broadband customers across Europe. This long-expected deal is Vodafone’s largest, since its acquisition of Mannesmann at £112bn in 2000.
On this Vittorio Colao, the Chief Executive of Vodafone Group stated that, “This transaction will create the first truly converged pan-European champion of competition. It represents a step change in Europe’s transition to a gigabit society. Vodafone will become Europe’s leading next generation network owner, serving the largest number of mobile customers and households across the European Union.”
It is believed that this deal will give a huge competition to Deutsche Telekom which is Europe’s Largest Telecom Operator, in Germany and thus it has expressed strong objections to this move of Vodafone. Timotheus Höttges, its chief executive, has indicated about the distortion of the competition, and added, “I personally will fight for fair competition for our customers, to ensure that we do not face a disadvantage.”
The deal entails that the company will pay €10.6bn in cash to Liberty Global, on which the US business said that “it would provide significant additional flexibility to optimise growth and shareholder returns”.
Vodafone has also concurred on paying €250m as a break fee, in case if the acquisition remains uncompleted.