With the clearance of regulatory approval, LGI Broadband
Operations, Inc. - the business arm of
Liberty Global Inc.
) completed the pending acquisition of OneLink Communications for
a total consideration of about $585 million.
The completion of the deal will expand Liberty Global's market
share in Puerto Rico to 70%, hence making it one of the largest
operators in the island. Subsequently, OneLink will be included
with LGI's existing business.
In the recent past, Liberty Global pursued a few major
acquisitions, which resulted in some financial constraints for
the company. Consequently, the company has joined forces with
private investment group Searchlight Capital Partners, L.P. to
buy full stake in OneLink Communications.
Liberty Global initiated its business restructuring from early
2010. At present, the company is concentrating primarily in
Europe and Latin America while divesting operations in other
parts of the world.
Germany is one of the major growth areas for Liberty Global,
where it completed two major acquisitions. Liberty Global
acquired UnityMedia GmbH and Kabel Baden-Wuerttemberg GmbH &
Co. KG, the second and third largest cable TV companies in
Germany, respectively. Recently, it is rumored that Liberty
Global is planning to bid for Ziggo, the market leading cable
operator in Netherlands. The acquisition of Ziggo would virtually
place Liberty Global at the helm of the Dutch cable TV
Western Europe has become a lucrative market for cable
operators. These markets are witnessing growing demand for pay-TV
services together with triple-play bundled services that combines
basic cable TV, Internet and telephony. In the forthcoming years,
we believe Liberty Global's revenue will continue to benefit from
a "triple play" of video, broadband and telephone, as it signs up
more "bundled" customers in Europe.
However, moving ahead, deteriorating European economy and
stiff competition from
Virgin Media Inc.
BT Group plc.
) may act as headwinds for the company.We thus maintain our
long-term Neutral recommendation on Liberty Global.
Currently, Liberty Global has a Zacks #2 Rank, implying a
short-term Buy rating on the stock.
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