Monday, 14 October 2019

EU clears Vodafone’s $22 billion Liberty deal

Source: Bloomberg

BRUSSELS/LONDON: Brussels gave its blessing to Vodafone’s $22 billion purchase of Liberty Global’s cable networks in Germany and central Europe, clearing the way for the British company to become Europe’s largest mobile, broadband and TV provider.

The deal is the standout move by Vodafone in its bid to become a provider of superfast broadband and pay-TV, rather than just a pure mobile provider. The strategy, launched by former CEO Vittorio Colao, is designed to increase customer spending and deepen user loyalty.

For John Malone’s Liberty Global, the cable exit brings rich returns for assets worth more to an acquirer who can bundle them with other services than as a standalone business.

Shares in Britain’s Vodafone, the world’s No. 2 mobile operator, rose 1 percent after the European Commission gave the green light for the two groups to combine networks and better take on German market leader Deutsche Telekom.

Commissioner Margrethe Vestager said the approval was subject to remedies designed to ensure that customers will continue enjoying fair prices, high-quality services and innovative products.

“In our modern society access to affordable and good quality broadband and TV services is almost as asked for as running water,” she said.

In order to get the deal through the regulator, Vodafone had to agree to give smaller rival Telefonica Deutschland access to its enlarged high-speed broadband network.

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