As per recent Bloomberg report, Liberty Global plc. (LBTYA - Analyst Report), a leading cable MSO (multi service operator) in Europe, is on the verge of receiving European Union (EU)’s regulatory approval to acquire full control of Ziggo N.V., the largest cable MSO in the Netherlands.
At present, Liberty Global holds a 28.5% stake in Ziggo. Notably, the company will pay around $13.6 billion to acquire the remaining 71.5% stake in Ziggo including its outstanding debt. The deal will be completed through a stock and cash transaction.
Meanwhile, the deal has faced close scrutiny by the EU Competition Commission as the regulator expressed its concern over the impact the merger will have on the Netherlands’ cable TV industry and on the Flemish-speaking areas of neighboring Belgium.
Last month Liberty Global offered some concessions to defend its case against the anti-trust regulatory body. As part of the concessions offered, the company has decided to vend its premium pay-TV channel “Film1.” Furthermore, the company will not prevent online video streaming service providers such as Netflix Inc. (NFLX - Analyst Report) from accessing its web (Internet) network either contractually or technically.
Low-cost online video streaming service providers depend completely on Internet links for their offerings. In addition, Liberty Global has pledged not to discriminate against competitors that buy its content.
Liberty Global boasts a strong presence in the Dutch cable TV market as its UPC Broadband Holding BV unit is the second largest cable MSO in the nation.A merger between Liberty Global and Ziggo will create a dominant cable TV operator in the Netherlands with approximately 10.8 million revenue generating units. Ziggo also competes with telecom operators such as Royal KPN N.V. and Vodafone Group plc. (VOD - Analyst Report).
During the last 6 years, Liberty Global has been striving to extensively penetrate the European pay-TV industry with its bundled video, voice and Internet (data) services. The European markets are still relatively untapped for this unique triple-play offering. At present, Liberty Global is also pursuing a systematic diversification in the content development segment apart from steadily strengthening its foothold in the European pay-TV market.
In synergy with the latest policy, Liberty Global acquired TV content producer All3Media for $1 billion, in a partnership with Discovery Communications Inc. (DISCA - Analyst Report) in May 2014. Last month, the company acquired around 6.4% of ITV plc, the largest commercial TV broadcaster in the U.K., from British Sky Broadcasting Group plc.