Liberty Global’s Telenet has entered into a definitive agreement with KPN to acquire Base, the third-largest mobile network operator in Belgium, in an all cash transaction valuing Base at €1.325 billion.
“This acquisition will enable Telenet to compete more effectively in a mobile market with significant growth opportunities, while offering a full range of fixed and mobile services to the benefit of consumers and businesses in Belgium,” the company said in a statement.
“We fully support Telenet’s acquisition of Base, which represents a cost-effective and unique opportunity to expand Telenet’s mobile and fixed business in Belgium,” said Mike Fries, CEO of Liberty Global.
“Not surprisingly, the synergies are substantial and the price at 4.2x OCF is highly accretive to shareholders. Given Telenet’s scale in Belgium it can absorb the smaller Base business quickly and efficiently. Elsewhere in Europe we will continue to focus primarily on our existing MVNO arrangements and rapidly developing WiFi networks to provide seamless mobile voice and data services to our customers.”
Telenet has been an active player in Belgium’s mobile market through an MVNO since 2006. Telenet expects to make expenditures totaling approximately €240 million to upgrade the capacity and quality of Base’s mobile network and support systems and to integrate Base with Telenet’s operations, most of which will occur over the next few years.
Telenet intends to finance the acquisition of Base through a combination of €1 billion of new debt facilities and existing liquidity. The acquisition of Base is subject to customary closing conditions, including merger approval from the relevant competition authorities.