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LONDON (Alliance News) - Vodafone Group PLC and Liberty Global PLC late on Monday said they had agreed to merge their operations in the Netherlands, creating a joint venture between the two covering the country.
Vodafone had disclosed discussions with Liberty about such a venture at the beginning of February.
Under the agreement, Vodafone's Netherlands business will be merged with Liberty Global's Ziggo brand, creating a communications provider with more than 15 million revenue-generating customers, along with a combination of their respective enterprise service platforms.
The pair said combining Vodafone's local mobile business with Ziggo's broadband network in the Netherlands will create a stronger fixed and mobile competitor in the Dutch market.
Based upon the value of each business, Vodafone will pay Liberty Global around EUR1.0 billion to equalise the 50:50 ownership of the joint venture. The two expect the deal to deliver total synergies of around EUR280.0 million a year by the fifth full year after the deal closes.
"The combination of Vodafone?s leading mobile business with Ziggo?s successful broadband and TV business creates a strong and competitive integrated communications player, which will invest in digital infrastructure, entertainment services and productivity applications for Dutch consumer, business and public sector customers," said Vittorio Colao, Vodafone's chief executive.
"This transaction marks a continuation of Vodafone?s market-by-market convergence strategy and we look forward to partnering with Liberty Global to create a fully integrated provider in one of our core European markets," Colao added.
"Throughout Europe, Liberty is capitalizing on the rising demand for lightning-fast broadband speeds, the coolest digital TV platforms and apps, and seamless 4G wireless connectivity. Soon, both Ziggo and Vodafone customers in the Netherlands will be at the forefront of this new world, and we couldn't be more excited about our partnership with Vodafone," said Mike Fries, the chief executive of Liberty Global.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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