As the news broke that Liberty Global has secured Ziggo in a deal that values the Dutch cable operator at €10 billion ($13.7 billion) including debt, two questions were on everyone's lips: will there be an all-out war between Liberty and Vodafone as the two race to mop up Europe's last remaining independent cable assets, and what on earth will Rene Obermann do next?
The first question already seems to have been answered with a resounding "yes" as reports emerged that Liberty was already targeting Spain's Ono, which is also believed to be a key focus for Vodafone. Vodafone has already fended off Liberty Global in what is the operator's biggest cable move so far: the €7.7 billion acquisition of Kabel Deutschland Holding in Germany.
Earlier this week Bloomberg reported that Vodafone is already in talks with the owners of Ono and could announce a deal in the next few weeks. The Financial Times had already reported last week that Ono is preparing a flotation that could value it at €7 billion. The company could still pursue the IPO route instead of a sale to a telecoms or cable giant.
Although Liberty Global and Vodafone could find themselves bidding for the same assets in order to build up fixed broadband and TV assets, their strategies are subtly different. Liberty Global has spent almost $50 billion on European cable assets over the past decade, Bloomberg noted, and has said it would target opportunities in Southern Europe in order to build its cable empire further.
For Vodafone, buying up fixed assets falls under its convergence strategy: the former "mobile only" cry has been replaced by the hunt for fixed networks to complement mobile networks in order to offer bundles of fixed and mobile services to consumers. Nonetheless, Ziggo also now operates an MVNO in the Netherlands: multi-play is now a universal strategy.
As for the second question, former Deutsche Telekom CEO Rene Obermann has been CEO of Ziggo for less than a month and is already out of a job. Reports have suggested that Deutsche Lufthansa is one company interested in the former telecoms chief. However, if reports in Rheinische Post are correct, Obermann – who is due to leave once the Liberty transaction closes - walks away from Ziggo with €4.7 million. Not bad for a month's work.
- see this Rheinische Post article (translated by Google Translate)
- see this Reuters article
- see this Bloomberg article
- see this Financial Times article (sub. req.)
- see this separate Bloomberg article
- see this separate Financial Times article (sub. req.)
- see this Liberty Global release
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