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Vodafone offers €7.7 billion for Kabel Deutschland

Staff writer |
Vodafone announceds its intention to acquire Kabel Deutschland for €87 per share in cash, valuing the entire fully diluted ordinary share capital of Kabel Deutschland at €7.7 billion.

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The Transaction will be implemented by Vodafone's wholly-owned subsidiary Vodafone Vierte Verwaltungsgesellschaft mbH for €84.50 per share in cash plus the payment of the €2.50 dividend announced by Kabel Deutschland on 20 February 2013.

The management and supervisory boards of Kabel Deutschland welcome the Transaction. The combination of Vodafone and Kabel Deutschland will create a leading integrated communications operator, with €11.5 billion of pro forma revenues in Germany, offering consumer and enterprise customers premium unified communications services. Following completion of the Transaction, Vodafone will have 32.4 million mobile, 5.0 million broadband and 7.6 million direct TV customers in Germany.

Vodafone sees significant potential to accelerate the growth in Vodafone's and Kabel Deutschland's broadband, telephony and TV businesses by leveraging Vodafone's leading brand and extensive distribution and by cross-selling to each company's customer base.

Vodafone's intention is that Kabel Deutschland's management will be responsible for the combined consumer fixed line business throughout Germany. The combined management team of Vodafone and Kabel Deutschland will have significant expertise across all segments of fixed and mobile communications and TV.

Vodafone expects in-market cost and capex synergies with an annual run-rate by the fourth full year post completion exceeding €300 million before integration costs, equivalent to a net present value exceeding €3.0 billion after integration costs.

Vodafone believes that there is significant upside potential from revenue synergies, including a net present value exceeding €1.5 billion from cross-selling and improved customer loyalty.

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