Vodafone seals €7.7bn union with Kabel Deutschland


Author: Daniel Thomas
Coverage Type: reporting
Location:
Kabel Deutschland, Betastrasse 6 - 8, Unterfoehring, 85774, Germany

Vodafone has finally arrived at the altar with Kabel Deutschland, having secured the hand of the management with a €7.7bn takeover offer three years after it first flirted with the German cable company.

The company is no cheap date – the Kabel’s valuation has increased fourfold from an IPO value of €22 a share in 2010 to the take-out bid of €87, underscoring the rampant increase in valuations in the cable sector in the period. But the price of the deal – described by Vodafone as “full, but fair” – is still less than its worth to the British company’s long-term future, according to Vodafone chief’s executive Vittorio Colao. The acquisition shows the importance of a strategy designed to turn the mobile operator into a combined TV, internet and telecoms group based on fixed-line as well as mobile networks across Europe. Some analysts also say that the transaction makes the long mooted sale of its US stake in Verizon Wireless more likely, as it would raise funds that could go towards strengthening Vodafone’s core European operations. Colao, however, would not be drawn on the question. There is nothing new to say on any US discussion, he says, with his attention for now fixed on Germany.

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