Vodafone has agreed to buy Kabel Deutschland in a €7.7 billion deal that will establish the UK mobile operator as a leading triple-play cable provider in Germany – offering TV, broadband, mobile and fixed-line phone services.
Vodafone is due to pay €87 per share, an increase of 37% on Kabel Deutschland’s share price as at 12 February 2013, the last trading day before takeover speculation for Kabel Deutschland first emerged. The deal values Kabel Deutschland’s at approximately €7.7 billion, and represents a total enterprise value of €10.7 billion, assuming €3 billion of adjusted net debt.
Kabel Deutschland said that the takeover is primarily aimed at delivering growth in a “in a rapidly changing telecommunications and TV market,” which can be realised by combining Kabel Deutschland’s fixed line infrastructure and Vodafone’s strong position in the mobile market.
Vodafone, which confirmed earlier this month that it had approached Kabel Deutschland about a potential offer, said that the combination of the two firms will create a business with €11.5 billion of pro forma revenues in Germany, and would give it 32.4 million mobile, 5.0 million broadband and 7.6 million direct TV customers in the country.
Vodafone said it saw “significant potential” to accelerate the expansion of Kabel Deutschland’s business, claiming that it’s subscriber base is still “under penetrated” with pay TV and broadband penetration only 12% and 16% respectively.
It added that the deal was part if its stated market-by-market convergence strategy of wholesale, organic fibre deployment or mergers and acquisitions.
“German consumer and business demand for fast broadband and data services continues to grow substantially as customers increasingly access TV, fixed and mobile broadband services from multiple devices in the home and workplace and on the move, ”said Vodafone Group Chief Executive Vittorio Colao.
“The combination of Vodafone Germany and Kabel Deutschland will greatly enhance our offerings in response to those needs and is consistent with Vodafone’s broader strategy of providing unified communications services,” he added.
Kabel Deutschaland CEO Adrian v. Hammerstein said: “Kabel Deutschland and Vodafone are an ideal fit. Together, we have the opportunity to become Germany’s leading telecommunications and television provider and to create what for the German market is a unique, winning combination of fixed line and mobile communications.”
The Management Board of Kabel Deutschland said it considers the price proposed by Vodafone attractive for shareholders and intends to recommend the offer, and said the deal could close before the Kabel Deutschland Annual General Meeting on 10 October 2013.
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21st October 2019