US billionaire John Malone’s cable company Liberty Global has acquired Germany's second-largest cable operator, Unitymedia for €3.5 billion including net debt.
Liberty Global acquired the asset from a group of stock holders led by London’s BC Partners and New York’s Apollo.
The deal represents the fruition of a long held ambition for Malone, to amplify his presence in the European cable market with scale.
Malone, attempted to enter the German market in 2002 when it tried to take over Deutsche Telekom’s former cable networks, but the move was blocked by the German regulator.
Liberty Global is established in ten European markets including Austria, Belgium, the Netherlands and Slovakia and is connected to nearly 12 million customer households. It holds PayTV and broadband interests in Japan, Chile and Australia with Austar..
“We are excited about this transaction as it complements our existing European footprint and has significant untapped growth potential in one of the fastest-growing cable markets in Europe. The addition of Unitymedia not only enhances our European presence, but adds significant scale to our global operations, as our footprint, including Unitymedia, will exceed 40 million homes,” said Liberty Global CEO and president Mike Fries.
Unitymedia’s footprint passes over 8.8 million homes, covering cities such as Cologne, Dusseldorf and Frankfurt. As at the end of September, the company had 4.6 million customers.
Fries added that Unitymedia suited Liberty Global because it had an upgraded network, an experienced management team and a good product offering.
The Cologne-based company offers a triple-play package of TV, internet and telephony in federal states North-Rhine Westphalia and Hessen in competition with ADSL providers such as Deutsche Telekom, United Internet and Vodafone.
Unitymedia CEO Parm Sandhu said that as part of the world’s largest international cable company, Unitymedia would benefit from increased access to new technologies.
The sale, which still needs regulatory approval, is expected to be completed in the first half of 2010.
In addition to being chairman of Liberty Global, Malone also chairs cable TV, satellite and diversified investments vehicle Liberty Media, which also has assets in the US and Europe.