Liberty Global sells chunks of its European operation to Vodafone
A large chunk (28%) of Liberty Global's European interests are to be sold to Vodafone Group plc as a definitive agreement has been reached that places an enterprise value of €19 billion on the Germany, Hungary, Romania and Czech Republic operations.
The sale should create a stronger competitor in the four markets and Liberty Global talks a lot about Germany as an example of a country lagging behind other countries in Europe and without mentioning Deutsche Telekom refers to their dominant position in the German broadband market and with the combined might of Vodafone which has a cable presence in Germany already the sale will still mean Vodafone will be half the size of the incumbent. Whether this sale will change the market dynamics and unleash investment is a big unknown but it is possible though it is not going to be until mid 2019 that regulatory approval is expected.
It is worth adding that Deutsche Telekom hold around 12% of BT Group plc shares as the largest shareholder (a result of the EE purchase) and the market position in Germany seems to echo a number of similar facets to the UK market. Liberty Global is selling its Austrian business to Deutsche Telekom.
This is also an important and exciting transaction for our customers and employees. 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.Mike Fries, Chief Executive Officer of Liberty Global
The UK looks set to be interesting moving forward as with Virgin Media on its way to 60% coverage and Vodafone planning a full fibre presence totalling 1 million premises (3.5% premises) in the next year or so and options to reach five million (17%) by 2025. It will be interesting to see if the competition in the UK for customers where the two networks overlap is a full on gloves off brawl or will it be a more gentle affair, it all hinges on what the BT Group and its local loop arm Openreach does.