Liberty Global has sold its Austrian cable provider UPC to T-Mobile Austria, a subsidiary of Deutsche Telekom, for 1.9 billion euros ($2.25 billion).
The sale stands in contrast to Liberty Global’s acquisition of companies elsewhere in Europe. Liberty Global has also recently pushed into producing original content.
For its part, by buying UPC Austria, Deutsche Telekom aims to combine UPC and T-Mobile Austria to compete with larger companies like A1 Telekom Austria. The combined company will be an integrated provider of mobile and fixed-line broadband Internet, mobile and fixed-line telephony, and TV and entertainment products, said Deutsche Telekom, which expects revenue of both companies to reach 1.2 billion euros.
“Deutsche Telekom is taking another major step to realize our strategy to become a fully converged operator in our European footprint,” said Srini Gopalan, the board member of Deutsche Telekom for Europe.
“The acquired cable network will be a perfect match with our best mobile network. It will allow customers to benefit from extended scope of services with fixed and mobile offerings from one source. We see a significant potential to accelerate growth in the Austrian market,” added Gopalan.
UPC Austria, which has operated for 20 years, boasts a network which reached 1.4 million homes and served 654,000 customers as of Sept. 30.
Mike Fries, the CEO of Liberty Global, said that the pact “highlights the strategic and financial value of the UPC Austria’s fiber-rich networks in a rapidly converging world and the significant synergies inherent in fixed-mobile mergers.”
Liberty Global said the deal’s proceeds will be used for “general corporate purposes which may include leverage reduction for the remaining UPC bank group, re-investment into its business, and support for the company’s share repurchase program.”
The deal, which is subject to approval from competition authorities, is expected to close in the second half of 2018.
LionTree Advisors acted as financial adviser to Liberty Global on the transaction.