John Malone’s Liberty Global Reaches $13.7 Bil Deal for Dutch Operator Ziggo After Sweetening Bid

liberty global

With deal, Liberty Global seeks to gain synergies in The Netherlands by consolidation MSOs

Liberty Global, the international cable operator holding company controlled by John Malone, announced a conditional agreement to acquire Dutch operator Ziggo in a deal valuing Ziggo at $13.7 billion.

Malone also has eyes on expanding his holdings in the U.S. cable market. The mogul’s Liberty Media holds a 27% stake in Charter Communications, which has launched a bid to acquire Time Warner Cable.

Ziggo in October 2013 rejected a big from Liberty Global, which acquired 28.5% of Ziggo’s outstanding shares last year. Ziggo in a statement had said that “was considered inadequate.” Under the new offer, Liberty Global said it will acquire 100% of Ziggo shares worth approximately $9.5 billion on a fully diluted basis (excluding transaction costs and other expenses).

The announcement of the Ziggo deal Monday comes after Liberty Global completed the acquisition of Virgin Media, the U.K.’s largest cable operator, in a $24 billion deal last June.

In the Netherlands, Liberty Global plans to combine its existing UPC Netherlands operations with Ziggo. Together they will have approximately $3.4 billion (€2.5 billion) in total revenue and pass 7 million Dutch homes, or more than 90% of the country’s households. The combined business will provide approximately 10 million video, broadband Internet and telephony services to more than 4 million unique customers.

“This transaction creates a nationwide cable champion that will drive investment and innovation for the benefit of Dutch consumers and businesses alike,” Liberty Global CEO Mike Fries said in a statement.

According to Fries, Liberty Global is aiming for about $219 million (€160 million) in annual run-rate synergies by 2018. According to Liberty Global, including the purchase of its initial 28.5% investment in Ziggo last year and the offer for the remaining Ziggo shares, the transaction multiple equates to 9.3 times estimated 2014 earnings before interest, tax, depreciation and amortization.

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