Deal valued at 18.4 billion euros
On May 9, Vodafone (VOD) announced that it had reached an agreement to purchase Liberty Global (LBTYA) assets in certain European markets. The deal was valued at 18.4 billion euros. As Reuters has reported, the deal is now set to face a full-scale review after the initial review raised certain antitrust concerns, specifically in Germany and the Czech Republic.
German telecom operator Deutsche Telekom (DTEGY) is opposed to the idea of Vodafone buying Liberty Global’s assets, claiming it would be bad for competition. Deutsche Telekom is the parent of American mobile operator T-Mobile (TMUS), which is seeking to merge with its rival Sprint (S) in a deal valued at around $26 billion.
Vodafone expects to close transactions in 2019
Despite EU antitrust regulators escalating their review of the deal, Vodafone still hopes to get the deal done by mid-2019. According to Reuters, EU regulators are expected to decide on the fate of the Vodafone-Liberty Global deal by May 2, 2019. But that deadline can change if Vodafone offers concessions to resolve antitrust concerns.
Extending footprint in Europe
The purchase of Liberty Global assets is expected to extend Vodafone’s foothold in broadband, television, and mobile services in Europe. Vodafone generated revenue of 46.6 billion euros in its fiscal 2018 ending in March. The company’s profit totaled 2.8 billion euros in that period, reversing a loss of 6.1 billion euros in the previous fiscal year. But revenue fell from 47.6 billion euros in fiscal 2017.