Liberty Global has announced its acquisition of London-based Cable and Wireless Communications (CWC), in a £3.5 billion deal which the company hopes will boster its position as a consumer and B2B comms provider in Latin America and the Caribbean.
Liberty Global is the largest cable operator in the world by subscribers, with 27 million customers across 14 countries. The company acquired Virgin Media in February 2013, and Dutch cable operator Ziggo in January the following year, in a deal which it claimed resulted in a combined reach of over 90 per cent of Dutch homes.
In a statement regarding the Liberty Global’s most recent activity, the stock is valued at 78.04 pence per CWC share, based on closing share prices as of 13 November 2015. CWC shareholders would be entitled to receive a dividend in the amount of 3.00 pence per share at the closing of the transaction, which would be in lieu of any previously announced CWC dividend, bringing the total consideration to 81.04 pence per CWC share.
Mike Fries, CEO of Liberty Global, said, “The acquisition of Cable and Wireless represents a watershed moment for our recently created LiLAC platform. It will add significant scale and management depth to our fast-growing operations in Latin America and the Caribbean, while creating a new regional consumer and B2B powerhouse. Upon completion, the combined business will serve 10 million video, data, voice and mobile subscribers, with leading positions across multiple markets.
“With our long track record of strong operational and financial performance in the region, we are confident that this combination will yield substantial synergies and accelerate our current prospects for the LiLAC Group to low double-digit rebased OCF growth over the medium term. Our high-quality networks and commitment to product innovation will provide the foundation for growth and value creation for both Liberty Global and LiLAC shareholders. Upon closing, the combined LiLAC and CWC businesses will benefit from the broader group’s scale and management expertise.”
Completion of the acquisition is subject to Liberty Global and CWC shareholder approvals, certain regulatory approvals. Following the completion of the acquisition, it is expected that CWC will be attributed to the LiLAC Group, with the Liberty Global Group holding an inter-group interest in the LiLAC Group.
The LiLAC Group will be approximately 25.44 per cent owned by existing LiLAC Group shareholders and 7.21 per cent owned by existing CWC shareholders, with 67.35 per cent represented by the inter-group interest in favour of the Liberty Global Group.