Vodafone pays €1bn to Liberty for Dutch joint venture
UK mobile giant Vodafone and John Malone’s cable company Liberty Global agreed last night to combine their operations in the Netherlands for a better footing in the local market.
Vodafone will pay €1 billion in cash to Liberty as part of the deal to combine its mobile operations with Liberty’s fibre broadband network Ziggo in a 50-50 joint venture.
“Together we will be a stronger competitor in the Netherlands”, Vodafone’s chief executive Vittorio Colao said in a statement.
Vodafone has faced increasing pressure in national markets from former national telecoms network monopolies like Deutsche Telekom, Telefonica, KPN and BT, which are able to sell packages of broadband Internet, TV and mobile telecoms services.
US-based Liberty’s Ziggo is the largest cable TV operator in the Netherlands, while Vodafone is the second-biggest mobile network operator, behind KPN.
The companies said they would see run-rate savings of €280m a year from the fifth year after the closing of the deal, which they expect towards the end of 2016.
Earlier this month, Vodafone said it was in limited talks with Liberty about a joint venture in the Netherlands, after the companies could not agree on a tie-up or exchange of assets last year, a deal that could have covered as many as seven European markets.
Separately, Liberty also reported total revenue of $4.60 billion in the fourth quarter of 2015, a 0.3% drop from a year earlier.
In the Netherlands, the company’s revenue rose 19.6% to $672.6m from the same time last year.
