A big deal for John Malone:
FRANKFURT (AP) — U.S. cable television operator Liberty Global Inc. said Friday it has agreed to pay €3.5 billion ($5.2 billion) for Germany’s second-largest cable TV provider, Unitymedia GmbH.
Liberty Global, based in Engelwood, Colorado, said it would acquire all of the shares for €2 billion, plus €1.5 billion in debt, from parent company Unity Media S.C.A., which is owned by a group of shareholders led by private equity companies Apollo and BC partners.
The deal, approved by Unitymedia’s board, could still face transaction costs.
Unitymedia, based in Cologne, has potential coverage of about 9 million homes and covers 10 of Germany’s biggest cities, including Cologne, Duesseldorf and Frankfurt.
It had about 5 million subscribers at the end of September and is the biggest cable television operator in North Rhine-Westphalia and Hesse, two of Germany’s most densely populated and prosperous states.
“We are excited about this transaction as it complements our existing European footprint and has significant untapped growth potential in one of the fastest growing cable markets in Europe,” Liberty Global chief executive Mike Fries said in a statement.
“The addition of Unitymedia not only enhances our European presence, but adds significant scale to our global operations,” he added.
Fries said that Unitymedia suited Liberty Global because of its upgraded network, an experienced management team and a good product offering. He expects the companies to benefit from synergies in procurement and network operations.
Unitymedia said the deal is expected to close in the first half of 2010, subject to regulatory approvals, and will increase customers’ access to new technology.
“With LGI’s backing, Unitymedia will become an even stronger competitive force,” it said in a statement.
Shares of Liberty Global, which trade on the Nasdaq, closed at $23.10 Thursday.