Vodafone clinches Kabel Deutschland buy

Michael Carroll
26 Jun 2013

Vodafone has successfully wooed the board of Kabel Deutschland, Germany’s largest cable operator, with an offer that values the firm at €7.7 billion ($10.08 billion).

The acquisition is Vodafone’s largest since it bought its way into India in 2007, and beefs up its presence in Germany by adding 7.6 million pay TV customers and 5 million broadband subscribers to the cellco’s existing 32.4 million mobile customers in the country. Vodafone plans to issue a public tender offer to cover €84.50 of the agreed €87 per share offer, with the remainder made up of a €2.50 dividend Kabel Deutschland planned to pay in the 2012/13 financial year.

Adrian Hammerstein, chief executive of the German cableco, says the deal offers an opportunity “to become Germany’s leading telecommunications and television provider,” with “a unique, winning combination of fixed line and mobile communications.”

While the operators talk up the potential for triple-play packages, Emeka Obiodu, principal analyst in Ovum’s Industry, Communications & Broadband practice, says the acquisition is a sign that Vodafone’s “European market is sickly and requires a good dose of medicine to jolt it back to life.”

Obiodu notes the Kabel Deutschland acquisition will allow Vodafone to tap additional revenue sources, at a time when the analyst firm is predicting steady declines in mobile income and rising pay TV revenue over the next five years.

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