Liberty-Ziggo Deal Awaits EU Approval - Analyst Blog

The anti-trust regulatory body, European Union Competition Commission, recently stated that it is examining the proposed merger deal between Liberty Global plc. LBTYA and Ziggo N.V. Also the decision is expected to be delivered by May 8, 2014. The EU regulator has rejected Dutch Competition regulator's plea to take over the case despite its claim 0f understanding the domestic market better.

In Jan 2014, Liberty Globalreached an agreement to acquire a 100% stake in Ziggo N.V., the largest cable MSO (multi service operator) in the Netherlands. At present, Liberty Global holds a 28.5% stake in Ziggo. Liberty Global will pay approximately $13.7 billion to acquire the remaining 71.5% stake of Ziggo including its outstanding debt.

The deal will be completed through a stock and cash transaction. Per the deal, each Ziggo shareholder will receive €11.00 in cash, 0.2282 Liberty Global Class A ordinary shares and 0.5630 Liberty Global Class C ordinary shares.

Liberty Global already 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 country.

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.

Liberty Global is striving to extensively penetrate the European region with its bundled video, voice and Internet (data) services. The European markets are still relatively untapped for this unique triple-play offering.

Recently, the company decided to join RDK Management LLC., a joint venture between U.S. cable giants Comcast Corp. CMCSA and Time Warner Cable Inc. TWC. Last year, Liberty Global acquired license to test RDK standard in its next-generation Horizon IP video gateways. Liberty Global currently carries a Zacks Rank #3 (Hold).