Merger and acquisition activity will continue in the Eastern European cable market in the “medium and long term” according to SNL Kagan.
SNL note a high fragmentation in the cable sector leading to ongoing consolidation, along with the high levels of pay TV penetration, which limits greenfield growth opportunities in cable, while intense competition among multiple DTH operators increases the need for competitive offers.
Bulgaria led the M&A market throughout 2015, where two leading pay TV operators changed ownership. Telekom Austria Group firstly completed their acquisition of Bulgarian cableco blizoo Bulgaria, gaining 373,000 subscribers in the process.
Later in the year, Bulgarian telecom company VIVACOM was sold at auction for €330 million, with debts of €400 million taking the total implied cost of the purchase to €730million, making it the regions biggest pay TV deal of 2015.
Telekom Austria was also active in Slovenia and Croatia, where it acquired Amis, a broadband Internet and IPTV provider operating in both countries.
In the Baltics, East Capital Explorer AB has spent almost €80 million on recent acquisitions. The fund increased its stake in the company from 51 per cent to 62 per cent, followed by Starman’s acquisition of its Lithuanian counterpart Cgates. As a result, the group currently boasts 525,530 revenue generating units in the Baltics.