The anti-trust regulatory body, European Union Competition
Commission, recently stated that it is examining the proposed
merger deal between
Liberty Global plc.
) and Ziggo N.V. Also the decision is expected to be delivered by
May 8, 2014. The EU regulator has rejected Dutch Competition
regulator's plea to take over the case despite its claim 0f
understanding the domestic market better.
In Jan 2014, Liberty Globalreached an agreement to acquire a
100% stake in Ziggo N.V., the largest cable MSO (multi service
operator) in the Netherlands. At present, Liberty Global holds a
28.5% stake in Ziggo. Liberty Global will pay approximately $13.7
billion to acquire the remaining 71.5% stake of Ziggo including
its outstanding debt.
The deal will be completed through a stock and cash
transaction. Per the deal, each Ziggo shareholder will receive
€11.00 in cash, 0.2282 Liberty Global Class A ordinary shares and
0.5630 Liberty Global Class C ordinary shares.
Liberty Global already 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 country.
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.
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.
Recently, the company decided to join RDK Management LLC., a
joint venture between U.S. cable giants
Time Warner Cable Inc.
). Last year, Liberty Global acquired license to test RDK
standard in its next-generation Horizon IP video gateways.
Liberty Global currently carries a Zacks Rank #3 (Hold).
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