Liberty Global and Vodafone create a joint venture called VodafoneZiggo Group Holding B.V
Liberty Global and Vodafone Group have created a new 50:50 joint venture called VodafoneZiggo Group Holding B.V. Combining Ziggo’s fibre-rich broadband network with Vodafone’s mobile operation is designed to create a stronger converged competitor in the Dutch market,delivering significant benefits for consumers, businesses and the public sector through investment in digital infrastructure and customer experience.
VodafoneZiggo has combined revenue of over €4 billion (US$ 4.19billion) with 10 million fixed and five million mobile Revenue Generating Units (RGUs) and what is said to be the fastest-growing business-to-business (B2B) business in the market. Following the divestment of Vodafone’s consumer fixed business, Vodafone Thuis, the estimated net present value of total synergies for the transaction remains around €3.5 billion (US$ 3.66billion).
Following the recapitalisation of VodafoneZiggo and after taking into account the €0.8 billion (US$ 0.98billion) equalisation payment by Vodafone, Liberty Global will receive €2.2 billion (US$ 2.30billion) and Vodafone will receive €0.6 billion (US$ 0.63billion) in cash payments post-closing.
Mike Fries, CEO of Liberty Global, commented, “This joint venture is great news for Dutch consumers and businesses. VodafoneZiggo will be the most innovative provider of converged communications services in the Netherlands with a full suite of market-leading TV, broadband, fixed-line and mobile products on day one of the JV. We are also excited for our shareholders.
This is a highly accretive transaction with significant synergies and a predictable dividend stream. When including over €500 million (US$ 523.46billion) of cash generated and up-streamed since the announcement of the deal back in February, total proceeds to Liberty will exceed €2.7 billion (US$ 2.83billion). We look forward to deploying that capital to drive long-term growth and investor returns.”
Vittorio Colao, Vodafone Group chief executive, said, “Today marks the creation of a strong integrated communications provider in the Netherlands, combining the complementary skills and experience of Vodafone and Liberty to bring a range of benefits to consumers, enterprises and the public sector. The merged operation will be a stronger competitor in the Netherlands – one of our core European markets – and is a further example of Vodafone’s ability to create value for its customers and shareholders through an effective market-by-market convergence strategy.”
The JV will operate under both the Vodafone and Ziggo brands and will create a nationwide integrated communications provider with 7.1 million homes passed by the fibre-rich broadband network of Ziggo Group Holding B.V. and the nationwide 4G mobile coverage of Vodafone Netherlands. Of VodafoneZiggo approximately 15 million RGUs, 4.0 million are video, 3.1 million are high-speed broadband, 2.5 million are fixed-line telephony and 5.2 million are mobile.
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