Liberty Global looks to bolster LatAm LiLAC platform with proposed Cable & Wireless deal
International cable telecommunications provider Liberty Global is set to expand its footprint deeper into the Latin America market through a pending acquisition of U.K.-based Cable & Wireless Communications.
The deal is being structured in both cash and stock valued at $5.3 billion. In addition to the purchase price, Liberty Global would assume $2.7 billion in Cable & Wireless debt. Both companies said their respective boards have approved the proposed transaction.
Liberty Global noted the proposed deal will bolster its recently created LiLAC platform, which is a tracking stock covering Liberty Global’s assets in Chile and Puerto Rico. Cable & Wireless garners a large percentage of its recurring revenue from operations in Panama and the Caribbean.
“[The deal] will add significant scale and management depth to our fast-growing operations in Latin America and the Caribbean, while creating a new regional consumer and [business-to-business] powerhouse,” explained Mike Fries, CEO of Liberty Global. “Upon completion, the combined business will serve 10 million video, data, voice and mobile subscribers, with leading positions across multiple markets.”
In addition to its cable operations, Cable & Wireless provides mobile services across a handful of Latin American and Caribbean countries, and claims to be a market leader in 10 out of the 15 markets where it has operations. Cable & Wireless’ current operations were what was left from Vodafone’s $1.7 billion acquisition in 2012 of its European and Asian cable operations.
“While we remain confident that CWC’s unique and highly attractive business has a substantial long-term growth opportunity ahead of it, we believe the recommended offer represents an attractive premium for shareholders and secures earlier delivery of our long-term value potential, hence the board’s recommendation today,” said CWC Chairman Richard Lapthorne.
The proposed deal looks to put an end to previous conversations between Liberty Global and Vodafone Group that were said to include the trading of certain assets.
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