The European Commission signed off on Vodafone's $22 billion deal to buy Liberty Global's cable networks in Germany and Central Europe.
With Germany, the Czech Republic (also called Czechia), Hungary and Romania in hand, Vodafone will become Europe's biggest mobile, broadband and TV service provider. The European Commission's approval on Thursday was expected after Vodafone eased regulatory concerns related to competition in Germany.
To garner regulatory approval for the deal, Vodafone signed an agreement earlier this year to let rival Telefónica Deutschland access its broadband network in Germany.
“In our modern society access to affordable and good quality broadband and TV services is almost as asked for as running water," said the European Commission's Margrethe Vestager, commissioner, in a statement. "We have today approved Vodafone's purchase of Liberty Global's business in Czechia, Germany, Hungary and Romania subject to remedies designed to ensure that customers will continue enjoying fair prices, high-quality services and innovative products.”
While Vodafone still needs to clear a few additional regulatory conditions, it proclaimed itself in a press release as "Europe's leading converged operator" with 116.3 million mobile customers, 24.2 million broadband customers and 22.1 million TV customers across 13 European countries.
Former Vodafone CEO Vittorio Colao initiated the purchase of Liberty Global's assets in Germany and Central Europe as a means for Vodafone to branch out from its mobile business and into broadband and pay-TV.
While Liberty Global's John Malone built his cable legend on astute buys of cable systems, he was able to turn a large profit by selling off the assets to Vodafone.
The completion of the deal means Vodafone and CEO Nick Read, who took over that role in October, will now face off with Deutsche Telekom, which battled tooth and nail against the Vodafone/Liberty Global merger.
“With the European Commission’s approval of this transaction, Vodafone transforms into Europe’s largest fully-converged communications operator, accelerating innovation through our gigabit networks and bringing greater benefits to millions of customers in Germany, the Czech Republic, Hungary and Romania," Read said in a statement. "This is a significant step toward enabling truly digital societies for our customers.”
Prior to the deal, Vodafone had some assets in Germany, but they didn't overlap with Liberty Global's Unitymedia cable network.
In Germany, Vodafone plans to deliver gigabit mobile speeds to 20 million people by 2021 and fixed gigabit connections to 25 million households by 2022.
Vodafone expects to generate capex and cost synergies with a net present value of more than $6.7 billion after accounting for the integration costs. By cross-selling to the combined customer base, Vodafone said it would unlock sales opportunities worth $1.7 billion. The deal is expected to close on July 31.