Vodafone has agreed to pay $21.8 billion to buy Liberty Global‘s assets in Germany, the Czech Republic, Hungary and Romania to take on rivals with a broader offer of superfast cable TV, broadband and mobile.
The world’s second-largest mobile operator had held repeated talks with John Malone’s Liberty in recent years in a bid to broaden its offering and better compete in Europe with former monopolies such as Deutsche Telekom.
Vodafone will get access to 54 million homes on its cable and fibre network and enable it to cross sell a range of services to those customers, while also taking out costs.
The deal, one of the biggest in Vodafone’s history, follows a similar move in Spain where Vodafone bought cable operator Ono and is designed to help the group meet customer demand for a single package of fast communications services.
“Vodafone will become Europe’s leading next generation network owner, serving the largest number of mobile customers and households across the EU,” Chief Executive Vittorio Colao said.
Vodafone said combining the companies’ operations would generate cost savings of about 535 million euros a year before integration costs by the fifth year after the deal completes.
The two companies, which already have a joint venture in the Netherlands which is excluded from the deal, restarted talks in February about Vodafone buying Liberty’s assets in the other continental European countries where they overlap.
Liberty will continue to own the Virgin Media network in Britain.
The deal is likely to face a lengthy regulatory approval process, with rivals such as Deutsche arguing that it will give Vodafone too much control of the market. Both sides are targeting a completion by around the middle of 2019.
A break fee of 250 million euros will be payable to the British company, in certain circumstances, if the deal does not complete.