Vodafone and Liberty reveal merger details in Netherlands

network deals
Vodafone and Liberty Global will merge their telecom and cable businesses in the Netherlands floating a 50-50 joint venture for unified communication business.

The proposed joint venture will have presence in video, broadband, mobile and B2B services in the Netherlands.

Both the Vodafone and Ziggo brands will exist. The JV will have over 15 million revenue generating units — 4.2 million video, 3.2 million broadband, 2.6 million fixed-line telephony and 5.3 million mobile.

Ziggo clocked annual revenues of €2,484 million, while Vodafone Netherlands posted €1,929 million in 2015.

Total cost, Capex and revenue synergies will be approximately €3.5 billion. The integration costs will be €350 million. The company did not reveal their plans for job cut.

Vodafone will make €1 billion in cash to Liberty Global to equalize ownership in the joint venture — based upon the enterprise value of each business, and after deducting Ziggo’s €7.3 billion net debt.

New joint venture will target leverage of 4.5-5.0x covenant EBITDA.

Vodafone Group Chief Executive Vittorio Colao said: “The combination of Vodafone’s mobile business with Ziggo’s broadband and TV business creates a strong and competitive integrated communications player, which will invest in digital infrastructure, entertainment services and productivity applications.”

The JV will have a significant opportunity to provide Ziggo’s triple-play services to Vodafone Netherlands’ mobile consumers and enterprise customers and to provide Vodafone Netherlands’ mobile services to Ziggo’s residential and business customers.

Baburajan K
[email protected]