The JV will operate under both the Vodafone and Ziggo brands and will create a nationwide integrated communications provider with 7.1 million homes passed by the cable network of Ziggo and the nationwide 4G mobile coverage of Vodafone’s Dutch operation.
VodafoneZiggo has nearly 15 million RGUs, of which 4.0 million are video, 3.1 million are high-speed broadband, 2.5 million are fixed-line telephony and 5.2 million are mobile. For the twelve months ended September 30, 2016, the JV would have generated over €4 billion of revenue.
Following the divestment of Vodafone’s consumer fixed business Vodafone Thuis, the estimated net present value of total synergies for the transaction remains around €3.5 billion.
Following the recapitalisation of VodafoneZiggo and after taking into account the €0.8 billion equalisation payment by Vodafone, Liberty Global will receive €2.2 billion and Vodafone will receive €0.6 billion in cash payments post-closing.
“This joint venture is great news for Dutch consumers and businesses. VodafoneZiggo will be the most innovative provider of converged communications services in the Netherlands with a full suite of market-leading TV, broadband, fixed-line and mobile products on day one of the JV,” commented Mike Fries, CEO of Liberty Global.
“We are also excited for our shareholders. This is a highly accretive transaction with significant synergies and a predictable dividend stream. When including over €500 million of cash generated and up-streamed since the announcement of the deal back in February, total proceeds to Liberty will exceed €2.7 billion. We look forward to deploying that capital to drive long-term growth and investor returns.”
Vittorio Colao, Vodafone Group Chief Executive, said, “Today marks the creation of a strong integrated communications provider in the Netherlands, combining the complementary skills and experience of Vodafone and Liberty to bring a range of benefits to consumers, enterprises and the public sector. The merged operation will be a stronger competitor in the Netherlands – one of our core European markets – and is a further example of Vodafone’s ability to create value for its customers and shareholders through an effective market-by-market convergence strategy.”