Liberty Global Offers Concessions to EU for Ziggo Takeover - Analyst Blog


Liberty Global plc. ( LBTYA ), a leading cable MSO (multi service operator) in Europe, recently offered some concessions to ease the concern of the anti-trust regulatory body, European Union (EU) Competition Commission regarding its proposed takeover of Ziggo N.V., the largest cable MSO in the Netherlands.  

However, the details of the concession offered have been kept under wraps. In Jan 2014, Liberty Global had reached an agreement to acquire a 100% stake in Ziggo. The regulatory body is likely to take into consideration the feedback of third parties on the terms of concessions.

At present, Liberty Global holds a 28.5% stake in Ziggo. Notably, Liberty Global will pay around $13.6 billion to acquire the remaining 71.5% stake in Ziggo including its outstanding debt. The deal will be completed through a stock and cash transaction.

The EU regulatory body is currently evaluating the deal and has expressed its concern over the impact the merger will have on the Netherlands' cable TV industry and on the Flemish-speaking areas of neighboring Belgium. The EU deadline for a decision on the deal is Oct. 17, 2014.

Liberty Global boasts a strong presence in the Dutch cable TV market as its UPC Broadband Holding BV unit is the second largest cable MSO in the nation.A merger between Liberty Global and Ziggo will create a dominant cable TV operator in the Netherlands with approximately 10.8 million revenue generating units. Ziggo also competes with telecom operators such as Royal KPN N.V. and Vodafone Group plc. ( VOD ).

Liberty Global is striving to extensively penetrate the European region with its bundled video, voice and Internet (data) services. The European markets are still relatively untapped for this unique triple-play offering.

The company has also joined the RDK Management LLC., a joint venture between U.S. cable giants Comcast Corp. ( CMCSA ) and Time Warner Cable Inc. ( TWC ). In 2013, Liberty Global acquired the license to test RDK standard on its next-generation Horizon IP video gateways. Liberty Global currently carries a Zacks Rank #3 (Hold).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: EU , LBTYA , CMCSA , VOD , TWC

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