Vodafone has reached an agreement with Kabel Deutschland’s board to take over the German cable TV firm for €7.7 billion ($10.1 billion), the London-based telecommunications operator said in a statement (via BBC News).
The transaction will be in the form of a voluntary public tender offer by its wholly-owned subsidiary Vodafone Vierte Verwaltungsgesellschaft mbH for €87 per share in cash – made up of €84.50 plus the payment of the €2.50 dividend announced by Kabel Deutschland on 20 February 2013 – and Kabel’s board will recommend that its shareholders accept the offer.
Vodafone plans to let Kabel’s management take responsibility for the combined consumer fixed line business throughout Germany.
Vodafone CEO Vittorio Colao said in the statement:
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. The combination of Vodafone Germany and Kabel Deutschland will greatly enhance our offerings in response to those needs.
After the acquisition of Kabel, Vodafone will have 32.4 million mobile, 5 million broadband and 7.6 million direct TV customers in Germany. The company said it expects in-market cost and capex synergies from the deal to exceed €300 million ($393 million) by the fourth year post-completion and before integration costs. It added revenue synergies could potentially exceed €1.5 billion ($1.97 billion) due to cross-selling products and improved customer loyalty.
Vodafone has been struggling in Europe as it strives to compete against other companies. In April, Vodafone had announced its intention to cut 500 jobs from its Germany operations and in January, it reduced its workforce in Spain.
Vodafone made an offer of around €7.2 billion ($9.4 billion) to Kabel two weeks ago, which was reportedly deemed to be inadequate. Last week, US media group Liberty Global had made a preliminary approach for Kabel.
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