Liberty Global and Vodafone to merge their Dutch operations
Combining Ziggo’s fiber broadband network with Vodafone’s mobile operations will create a stronger fixed and mobile competitor in the Dutch market.
Total cost, capex and revenue synergies with an estimated net present value of approximately €3.5 billion after integration costs.
Total synergies include cost and capex synergies with run‐rate savings of €280 million on an annual basis by the fifth full year post closing, equivalent to a net present value of approximately €2.5 billion after integration costs.
Based upon the enterprise value of each business, and after deducting Ziggo’s €7.3 billion of net debt, Vodafone will make a cash payment to Liberty Global of €1 billion to equalize ownership in the joint venture. Vodafone Netherlands will be contributed on a debt and cash free basis.
New joint venture will target leverage of 4.5‐5.0x covenant EBITDA. Accordingly, additional financing is expected to be raised by the joint venture in the future to reach target leverage. Proceeds from the financing will be distributed equally between Vodafone and Liberty Global.
The transaction is expected to close around the end of 2016 and is subject to regulatory approvals and consultations with the Works Councils. ■