Vodafone likely to continue shopping spree after securing Kabel Deutschland

Vodafone managed to clinch its 7.7 billion ($10.2 billion) acquisition of Kabel Deutschland, paving the way for the company to offer bundles of telecommunications services in Germany. Vodafone's bid for Kabel Deutschland had been threatened by investors seeking better terms.

Vodafone expects to close the purchase of Kabel Deutschland by the end of this month. The transaction still requires approval from the European Union's regulatory officials.

According to Bloomberg, billionaire Paul Singer's Elliott Management Corp., which holds around 11 per cent of  Kabel Deutschland, had been withholding approval of Vodafone's purchase of the company. However, Vodafone reported that it was able to win approval from at least 75 per cent of Kabel Deutschland investors--the minimum the company needed to pass the deal. Vodafone did not report on the details of the Kabel Deutschland shareholder vote for the transaction.

Vodafone is riding high from the $130 billion sale of its 45 per cent stake in Verizon Wireless to Verizon Communications, and has said it will use the proceeds from the sale to pay down debt, make acquisitions and fund the rollout of LTE networks across Europe.

Vodafone's acquisition of Kabel Deutschland is part of the operator's plans to expand beyond just wireless technology to offer bundles of TV, wired Internet and cell phone service. Interestingly, the strategy essentially mirrors that of Verizon, which purchased Vodafone's stake in Verizon Wireless in order to embark on a "One Verizon" strategy that mingles wireless technologies with TV and wired Internet connections.

Vodafone hinted at its bundling ambitions last year when it acquired fibre provider Cable & Wireless Worldwide.

With its newfound financial war chest, Vodafone is turning its attention toward its "Project Spring" effort, which is intended to cover around 90 per cent of the population in Vodafone's top five European markets with LTE by 2017.

And what is next on Vodafone's shopping list? According to the Guardian, Vodafone could next make a play for Fastweb, Italy's third largest broadband operator with 1.9 million customers. The Guardian noted that Fastweb's owner, Swisscom, had previously prohibited a sale of the company. Vodafone's new financial strength could allow the operator to convince Swisscom to sell the business.

For more:
- see this Guardian article
- see this BBC article
- see this Bloomberg article

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