By Business & Finance 
The 50-50 joint venture will create a unified communications provider in the Netherlands with strengths across video, broadband, mobile and B2B services.
Liberty Global is the largest international cable company with operations in 14 countries. Its products are provided through next-generation networks and technology platforms.
Liberty Global’s consumer brands are Virgin Media, Ziggo, Unitymedia, Telenet, UPC, VTR and Liberty. The company’s operations also include Liberty Global Business Services and Liberty Global Ventures.
Vodafone provides a range of services including voice, messaging, data and fixed communications and has mobile operations in 26 countries.
Combining Ziggo’s fiber-rich broadband network with Vodafone’s leading mobile operations will create a strong fixed and mobile competitor in the Dutch market.
The transaction is expected to close around the end of 2016 and is subject to regulatory approvals and consultations.
The joint venture is expected to generate significant efficiencies, with run-rate cost and capex synergies of €280m on an annual basis by the fifth full year post closing, equivalent to a net present value of approximately €2.5bn after integration costs.
Based on the required steps and subject to the customary closing conditions and approvals, Liberty Global and Vodafone anticipate that completion will take place around the end of 2016.
Vittorio Colao, Group chief executive, Vodafone, said: “The combination of Vodafone’s leading mobile business with Ziggo’s successful broadband and TV business creates a strong and competitive integrated communications player, which will invest in digital infrastructure, entertainment services and productivity applications for Dutch consumer, business and public sector customers.”
He continued: “Together we will be a stronger competitor in the Netherlands, benefiting customers of both companies and the market as a whole. This transaction marks a continuation of Vodafone’s market-by-market convergence strategy and we look forward to partnering with Liberty Global to create a fully integrated provider in one of our core European markets.”
Mike Fries, CEO, Liberty Global, said: “This powerful combination of the best fixed and mobile networks in the Netherlands will deliver huge benefits to Dutch consumers and businesses.”
He continued: “Based upon the enterprise value of each business, and after deducting Ziggo’s €7.3bn of net debt, Vodafone will make a cash payment to Liberty Global of €1b to equalise ownership in the joint venture, reflecting the €2bn difference in the two companies’ equity value.”
