John Malone, businessman and former chief executive of Tele-Communications Inc., attends the annual Allen & Company Sun Valley Conference, July 7, 2016 in Sun Valley, Idaho.
- Vodafone is buying Liberty Global's operations in Germany, the Czech Republic, Hungary, and Romania for €18.4 billion ($21.7 billion).
- The deal will give Vodafone a much larger mobile and broadband footprint in central and eastern Europe.
- The transaction still needs to be cleared by competition regulators.
LONDON - British telecoms group Vodafone has reached a €18.4 billion ($21.7 billion) deal to buy a range of European assets from billionaire "cable cowboy" John Malone.
Vodafone announced on Wednesday that it has agreed to acquire Liberty Global's operations in Germany, the Czech Republic, Hungary, and Romania. The deal consists of €10.8 billion ($12.7 billion) in cash paid to Liberty Global and €7.6 billion ($8.9 billion) of existing debt that Vodafone will take on.
Liberty Global is controlled through voting rights by US billionaire John Malone, the
Malone, who is worth over $7 billion, is also the chairman of Liberty Media in the US, which owns Formula 1 racing and Major League Baseball team the Atlanta Braves. Malone was said to be the driving force behind Charter Communications' $67 billion acquisition of Time Warner in 2016.
Liberty Global is the world's biggest international TV and broadband company, operating through brands such as Virgin Media in the UK, Unitymedia in Germany, and Telenet in Belgium. The group also has investments in UK TV producer ITV, film studio LionsGate, and Formula E racing.
The deal, which was first rumoured in February, will supercharge Vodafone's cable internet and mobile telecoms footprint in central and Eastern Europe. Unitymedia, which Vodafone will acquire, is Germany's second-largest cable operator.
Vodafone CEO Vittorio Colao said in a statement that the deal is "a transformative combination for Vodafone that will generate significant value for shareholders."
"We are committed to accelerating and deepening investment in next-generation mobile and fixed networks, building on Vodafone's track record of ensuring that customers benefit from the choice of a strong and sustainable challenger to dominant incumbent operators," he said.
British group Vodafone runs internet and mobile businesses across 25 countries, including the UK and India. The company has over 500 million mobile customers globally and close to 20 million broadband customers.
Calao said: "Vodafone will become Europe's leading next generation network owner, serving the largest number of mobile customers and households across the EU."
The deal is still subject to regulatory approval and is expected to close in the middle of next year. Vodafone shares rose by 1.6% on news of the deal.
Liberty Global said in a separate statement that the assets being sold represent 28% of the operating cash flow of the group.
Liberty said it would still be Europe's biggest cable TV and broadband provider after the transaction, with 26 million subscribers across the continent.
Liberty Global CEO Mike Fries said in a statement: "In each of these markets, the combination of Liberty Global and Vodafone's businesses will transform the competitive landscape and bring a new level of convergence to customers.
"Now more than ever, Europe needs strong competition from scaled national challengers willing and able to invest in next-generation wireless, video and broadband services."
Morgan Stanley, Robey Warshaw, and UBS advised Vodafone on the deal. LionTree and Goldman Sachs advised Liberty Global.
The Vodafone-Liberty Global deal comes during a flurry of activity in the telecoms and media industry. Comcast is currently locked in a bidding war with 21st Century Fox for European pay-TV group Sky and Comcast is said to be considering gate-crashing Fox's transaction with Disney.
Liberty Global also agreed to sell its Austrian unit to Deutsche Telekom for €1.9 billion ($2.2 billion) last December.
