Capping months of negotiation, Vodafone Group of the U.K. and Liberty Global (LG) announced the signing of an €18.4 billion (U.S. $22.5 billion) agreement on Wednesday that would give Vodafone control over LG’s cable network assets in Germany, Hungary, Romania and the Czech Republic and thus solidify Vodafone’s position as one of the largest telecommunications carriers in continental Europe.
Considered by analysts to be one of the most significant industry consolidation transactions to take place in the European Union (EU) in more than a decade, Wednesday’s deal also ranks as Vodafone’s largest purchase since its £112 billion acquisition of German wireless carrier Mannesmann in 2000. If approved by regulators, the agreement would catapult Vodafone—the world’s second-largest wireless carrier by subscribers behind China Mobile—to the rank of the EU’s largest provider of cable and broadband services with control over 54 million customers and a network reach in excess of 110 million homes. Following on last year’s sale of LG’s Austrian cable unit to Deutsche Telekom (DT), the transaction does not include LG’s cable network assets in its remaining European markets which include the U.K., Ireland and Switzerland. LG would receive a €10.6 billion cash infusion through the deal and would also be relieved of €7.6 billion of debt that would be assumed by Vodafone.
Contingent upon receipt of EU and other required approvals, the parties expect to complete the transaction by mid-2019. As observers noted that the deal corresponds with Vodafone’s strategy of ranking among the top two carriers in each of the 20 nations where it operates, Vodafone CEO Cittorio Colao proclaimed that the transaction “will create the first truly converged pan-European champion of competition.”