Liberty Global to acquire Dutch cable company Ziggo for €10bn

Liberty Global to acquire Dutch cable company Ziggo for €10bn

Summary: Another sizeable acquisition is underway in Europe, with Liberty Global heading towards 90 percent market share in the Netherlands.

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Liberty Global, parent company of Dutch cable company UPC, announced on Monday that it is acquiring UPC competitor Ziggo, giving the company a 90 percent market share in the Netherlands.

Liberty Global, largely owned by billionaire and philanthropist John Malone, has had a 30 percent stake in Ziggo since late 2013. After years of negotiation, the company has finally reached an agreement to acquire the rest of Ziggo in a deal worth €34.53 per share, valuing the company at €10bn.

The deal will need approval from the shareholders of both companies as well as the Dutch Authority for Consumers and Markets in order to go through. After Liberty Global took the 30 percent stake in Ziggo last year, the Dutch regulatory body notified both companies that it would launch an investigation if a full takeover bid occurred.

Diederik Karsten, European director of Liberty Global, claimed not to fear this investigation, due to the way the Dutch market for cable services is designed: "The Dutch cable network has a geographical distribution in the Netherlands, meaning that consumers are not able to choose between UPC or Ziggo, their choice is dictated by their location. This means that an acquisition will change nothing in terms of market competition. Therefore, Liberty Global has no reasons to believe that the Authority for Consumers and Markets will have any reason to deny permission for the acquisition," he said.

Although, according to Karsten, nothing will change in terms of competition, with the company continuing to use the name Ziggo post-aquisition, there will be a significant loss of jobs as a result of the takeover, according to Bert Groenewegen, financial manager at Ziggo.

Although Groenewegen did not disclose the number of positions that could be affected, he said the merger could lead to more job opportunities in future, because the acquisition will allow the company to grow.

Dutch trade union CNV has not welcomed the deal, saying it had feared job cuts if an agreement on the acquisition were to be reached: "You simply cannot merge two companies without it having staffing consequences. There are going to be duplicate positions, meaning that loss of jobs is inevitable," the union said on its website.

However, the loss of job is not the only thing CNV fears, according to Anselma Zwaagstra, an official for the union: "Liberty Global is an American company, working by different standards based on a different culture. It is likely that the company will not prioritise the Dutch habit of consulting with Dutch unions, for instance in times of reorganisation." 

'More efficient company'

The acquisition may not be good news in terms of employment, but according to Karsten, Dutch customers of both Ziggo and UPC have reason to welcome the new development: "What we will create is a more efficient company with more innovative possibilities. We don’t just want to become a bigger company, we want to become a better company as well". Should the acquisition be approved – a decision that will be made by  the Authority for Consumers and Markets within 35 working days – the two companies' networks will reach around seven million people in the Netherlands, which amounts to 90 percent of all Dutch households.

Topics: Broadband, Mobility, Telcos, EU

Martin Gijzemijter

About Martin Gijzemijter

Martin began his IT career in 1998 covering games and gadgets, only to discover that the scope of his interests extended far beyond that. Ironically, where he used to cover 'anything with a plug', he now focuses on the wireless world. A self-pronounced Apple enthusiast who can't live without his Windows PC, he writes tech news, reviews and tutorials for the Dutch market and stories about flying elephants for his two sons.

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  • Patriot Act and the Snowden revelations

    Interesting to see what that means on the privacy front for Dutch cable users...
    nds8