Vodafone share price rises as telco inks €18.4bn asset deal with Liberty

UK telco to buy operations in Germany, Czech Republic, Hungary and Romania

Vodafone share price rises as telco inks €18.4bn asset deal with Liberty

Shares in Vodafone (LON:VOD) have added more than one percent in London this morning as the blue-chip telco announced that it had agreed to acquire some of Liberty Global’s European assets. The €18.4-billion deal follows years of talks between the two companies and comes after they formed a joint venture in the Netherlands.

As of 08:23 BST, Vodafone’s share price had added 1.01 percent to 209.65p, outperforming the benchmark FTSE 100 index which currently stands 0.39 percent higher at 7,595.41 points. The telco’s shares have added about three percent to their value over the past year, as compared with about a 3.5-percent gain in the Footsie.

Liberty Global deal

Vodafone announced in a statement this morning that it had agreed to acquire Liberty Global's operations in Germany, the Czech Republic, Hungary and Romania for an enterprise value of €18.4 billion. The telco estimates that the cost and capex synergies from the deal will come in at about €535 million per year before integration costs by the fifth year post completion.

“This transaction will create the first truly converged pan-European champion of competition,” Vodafone’s chief executive Vittorio Colao commented in the statement, adding that the company would “become Europe's leading next generation network owner, serving the largest number of mobile customers and households across the EU”.

Challenging Deutsche Telekom

The deal, which is set to face scrutiny from regulators in Europe, is also set to challenge the dominant incumbent in Germany.

The deal is “exactly what German market needs, which is a stronger, more consolidated competitor to Deutsche Telekom in a market that has really lagged in innovation and investment,” Mike Fries, Liberty Global’s chief executive officer, told Bloomberg in an interview. “So I think this will get approved and I think it’s definitely in the best interests of consumers and we’ll make that argument.”

As of 08:57 BST, Wednesday, 09 May, Vodafone Group plc share price is 209.90p.

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