Vodafone finalizes acquisition of Kabel Deutschland

By IVC Staff Reporter

Jun 24, 2013 11:19 AM EDT

Vodafone Group Plc, the world's second largest wireless carrier, had finalized a preliminary agreement to purchase Germany's largest company Kabel Deutschland Holding AG.

Vodafone increased its bid to Eur7.7 billion (US$10.1 billion) to acquire the German cable company and gain access to its 8.5 million connected households. According to Vodafone, the acquisition of Kabel will result in synergies in cost and capital spending exceeding 3 billion euros after integration costs.

Analysts said that the deal will help Vodafone reinvigorate its fixed line operation as it can now offer potential customers "triple play" packages of phone, internet and TV subscriptions.

In May, Vodafone had completed a deal with Deutsche Telekom AG to use its high-speed Web network. With the Kabel Deutschland deal, Vodafone needs to be able to integrate the two fixed line networks and consumer offers.

As a result of the agreement, Kabel Deutschland's equity would be valued at about Eur7.7 billion and an enterprise value of about Eur10.7 billion.  Sources said Vodafone initially offered 80 euros a share, increasing it to Eur85 and finally to Eur87. Kabel Deutschland's board is set to recommend the Eur87 per share price offer.

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