Liberty Global Inc.
(
LBTYA
), a leading cable operator in Europe, Latin America, and
Australia, may finally quit from Australia. The company's proposed
disinvestment of Austar United Communications Ltd. to Foxtel get
Australian regulatory approval, at last. Australian Competition and
Consumer Commission (ACCC) clears the merger after Foxtel agrees to
give up its exclusive rights for Nickelodeon and National
Geographic Channel.
In July 2011, Liberty Global decided to divest its operations in
Australia. Austar, in which Liberty Global holds 54% stake, entered
into a definitive agreement with Foxtel, to sell 100% stake for
approximately $2 billion. Liberty Global will get around $1.08
billion. Foxtel is jointly held by Australian telecom giant
Telstra, News Ltd., a division of
News Corp.
(
NWSA
), and Consolidated Media Holdings.All these three shareholders
agreed upon the deal.
The Australian regulatory authority initially showed its
reluctance to clear the deal since it may create a monopoly. Foxtel
is the largest pay-TV operator in Australia and Austar is also a
leading pay-TV operator. However, both Foxtel and Austar argued
that the pay-TV operators in Australia are now facing increasing
competition from free-to-air TV stations and online entertainment
service providers.
The disinvestment of Austar indicates that Liberty Global will
concentrate solely on Europe and some parts of Latin America. From
early 2010, Liberty Global is gradually concentrating on
strengthening its foothold in Europe through a series of mergers
and acquisitions.
In the coming 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 and
Latin America. The triple play customer base increased 38.1% year
over year in 2011.
The company is also concentrating on its double play product,
Internet and telephony, which has the potential to expand.
Double play customer base penetration increased 10.3% in 2011.
LIBERTY GLBL-A (
LBTYA
): Free Stock Analysis Report
NEWS CORP INC-A (
NWSA
): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment
Research