Vodafone, Altice Forge €7B German Fibre Collaboration

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  • Vodafone Group Plc VOD and Altice created a joint venture (FibreCo) to deploy fibre-to-the-home (FTTH) to up to 7 million homes over six years.
  • FibreCo looks to invest up to €7 billion, which will likely finance 70% by debt.
  • The 50-50 fibre venture with French billionaire, Patrick Drahi's Altice, will build fibre optic lines to up to 7 million homes in Germany. 
  • The deal will likely close in the first half of next year.
  • Vodafone will likely receive cash proceeds from Altice of up to €1.2 billion, comprising upfront payment of €120 million at closing, additional deferred payments of up to €487 million, and an earn-out of up to €595 million.
  • Around 80% of the proposed network will focus on significant housing associations within Vodafone's current footprint, and the rest will focus on neighboring homes. 
  • It will sell wholesale access to rival telecommunication providers. 
  • Vodafone CEO Nick Read commented: "This significant infrastructure investment supports the country's social, economic, and digital development and the broadband ambitions of the German government as part of Europe's Digital Decade targets."
  • Altice Co-CEO David Drahi commented: "We have pioneered fibre joint ventures in France and Portugal and are thus thrilled to be able to replicate such a feat in Germany with such a partner."
  • Germany became Vodafone's biggest market after it bought cable operator Unitymedia along with other units for €18.4 billion in 2019, reports Bloomberg.
  • In October, Vodafone confirmed discussions with CK Hutchison Holdings LTD CKHUF about a possible combination of their U.K. businesses.
  • The deal would involve combining Vodafone UK and Three UK, with Vodafone holding 51% and CK Hutchison owning 49% of the new unit.
  • The U.K. Government rightly sees 5G as transformational for the economy and society and critical to the country becoming more competitive in an increasingly digital world. 
  • Price Action: VOD shares traded higher by 2.32% at $11.48 in the premarket on the last check Monday.
  • Photo Via Company
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