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Cable Technology Feature Article

January 29, 2014

Wheelings & Dealings: Liberty Global to Acquire Dutch Cable Company Ziggo for $9 Billion

By Michael Guta, TMCnet Contributing Writer

The merger and acquisitions taking place in the cable industry in 2014 will result in fewer companies in the industry. Only time will tell if this will benefit the consumer, but as with any other industry the lack of competition usually results in fewer innovations, which in the long term harms the customer. While the Time Warner and charter cable acquisition is making headlines, Liberty Global (News - Alert) PLC, the company owned by John Malone, has been acquiring valuable assets around the world. This includes the $16 billion purchase of Virgin Media last year, while at the same time increasing its stake in other companies.

Mr. Malone is continuing his spending spree by agreeing to purchase Dutch cable company Ziggo (News - Alert) NV for EUR6.9 billion ($9.44 billion). The total value of the deal including debt is EUR 10 billion ($13.6 6bilion). Mr. Malone's company already owns 28.5 percent of Ziggo, and the deal to acquire the company was initiated in August, concluding this Monday with a cash and stock deal. Ziggo shareholder will receive EUR11.00 ($15) in cash, 0.2282 Liberty Global Class A ordinary shares and 0.5630 Liberty Global Class C ordinary shares.

The deal is supposed to close by the second half of 2014 pending some regulatory approvals from the European Commission.

Liberty Global is the largest international cable company, active in 14 countries, including 12 in Europe. The company had revenues of $17 billion with 24 million customers who subscribe to nearly 48 million services as of September 30, 2013.

Once the acquisition goes through Liberty Global will have a stronger foothold in the Dutch market when it integrates with its wholly owned cable operator in the country, UPC. This will create the biggest completion for the nation's largest operator, Royal KPN (News - Alert) NV, which was the target of acquisition by America Movil SAB, the company owned by Carlos Slim.

"Our combined operations will reach over 90 percent of all Dutch households, allowing us to compete more effectively with the other national telecommunications and satellite platforms in the Netherlands," said Liberty Global Chief Executive Mike Fries.

Edited by Cassandra Tucker

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