After some on/off speculation (Vodafone Mulling Liberty Global Acquisition and Liberty/Vodafone Deal Off the Table), Liberty Global and Vodafone have agreed to merge their operations in the Netherlands. The merger will create a joint venture with a 50% stake for both companies. It is said that the new company will be a ‘national unified communications provider’ operating in video (4.2 million customers), mobile, broadband and B2B services and will operate under the Vodafone and Ziggo brands.
The total cost, capex and revenue synergise with an estimated net present value of €3.5 billion after integration costs. Based upon the enterprise value of each business, after deducting Ziggo’s (Liberty’s cable MSO) €7.3 billion of net debt, Vodafone will make a cash payment to Liberty Global of €1 billion to equalise ownership. Vodafone Netherlands will be contributed on a debt- and cash-free basis.
