As long mooted, Vodafone (VOD) has finally pulled off the proposed €18.4bn (£16.1bn) acquisition of Liberty Global’s operations in Germany, Czech Republic, Hungary and Romania.

Shares first got wind of the deal back in June 2017.

The deal values the incoming operations at 10.9-times earnings before interest, tax, depreciation and amortisation, according to analyst calculations.

Vodafone shares have ticked 1.2% ahead at 210.1p.


This builds on Vodafone’s existing European presence, an area where most of its growth recently has come from. It also makes the UK-listed company one of the most powerful quad-play operators on the Continent, which means supplying a combination of fixed-line, mobile, broadband and TV.

Vodafone claims today it will become the leading next generation network owner in Europe, although the deal still needs to be ratified by regulators.

Liberty Global is the US-based communications giant run by John Malone. It is also, interestingly, the current owner of Virgin Media, UK broadband and TV content supplier.

Analysts have long seen a tie-up between Vodafone and Virgin as a smart move, a point made by Shares in February.

While today’s deal bolster’s the mobile giant’s cable infrastructure no end, it still lacks similar superfast broadband capacity in the UK.


Buying Virgin could potentially solve this problem at a stroke, and make the combined business a far more compelling multi-play option for UK consumers in a notoriously competitive market.

‘The UK will become increasingly the odd man out in Europe for Vodafone from a strategic perspective should the Vodafone/Liberty deal go through, given that most of its revenue comes from mobile,’ says Megabuyte today.


Less known is the enterprise value Virgin could potentially bring to Vodafone. Virgin recently got down to the final three competitors on the £100m contract with IT infrastructure business GCI, only narrowly missing out. That’s no mean feat.

Virgin is also mooted to be casting glances at UK-based enterprise communications operator Daisy. Virgin is certainly showing enterprise ambition.

‘At the right price, we have no doubt that Liberty Global would sell Virgin Media, and Vodafone would be an obvious buyer as it would provide the fixed line/TV base that is so lacking for Vodafone in the UK,’ says Megabuyte’s Philp Carse.

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Issue Date: 09 May 2018