Liberty Global has announced plans to merge its operations in the Netherlands with Vodafone, creating a joint venture across the region for video, broadband, mobile and B2B services.
Revealed on Tuesday, the tie-up will bring together Ziggo, a cable operator which falls under parent company Liberty Global, and Vodafone's infrastructure to create a "stronger fixed and mobile competitor in the Dutch market," according to a statement announcing the move.
Under the terms of the deal, US cable operator Liberty Global will receive a cash payment of €1 billion (approximately $1.12 billion) from Vodafone, however, each company will possess 50 percent ownership of the new joint venture.
The firms estimate the JV will have a combined net value of roughly €3.5 billion after integration costs have been taken into account and Ziggo's €7.3 billion debt is cleared. As of 31 December 2015, Ziggo accounted for assets with a gross worth of €20.7 billion.
The JV will be run by six executives from Liberty Global and Vodafone, as well as two members nominated by the Works Council. The post of Chairman will be rotated annually and held by either a Vodafone or Liberty Global executive.
Vittorio Colao, Vodafone's Group Chief Executive commented:
"Together we will be a stronger competitor in the Netherlands, benefiting customers of both companies and the market as a whole.
This transaction marks a continuation of Vodafone's market-by-market convergence strategy and we look forward to partnering with Liberty Global to create a fully integrated provider in one of our core European markets."
The deal is expected to close at the end of 2016, subject to regulatory approval.
Liberty Global also recently reported the firm's financial results for Q4 2015, the three months ending Dec. 31. The Englewood, Colorada-based cable operator reported revenue of $18.3 billion with an operating income of $2.3 billion, an increase of five percent year-on-year.
Read on: Top picks