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Vodafone to buy Germany's Kabel Deutschland for €7.7bn

Vodafone Germany may expand the reach of its fixed line network with Kabel under its belt.
Written by Liam Tung, Contributing Writer on

Vodafone has announced plans to acquire Kabel Deutschland in a deal worth €7.7bn (£6.6 billion).

Though still subject to shareholder and regulatory approval, Kabel's board has recommended shareholders accept Vodafone's offer of €87 per share in cash.

The deal follows a bidding war for Kabel between Vodafone and Liberty Global, which recently acquired the UK's Virgin Media. All three compete with Germany’s incumbent player, Deutsche Telekom, which has about 40 percent of the broadband market in the country.

Kabel is a German triple-play network operator providing TV, broadband and fixed-line telephony via cable that currently passes 15 million homes in Germany and connects 8.5 million of them.

A merger between Vodafone Germany and Kabel would leave Vodafone with 32.4 million mobile subscribers, five million broadband customers, and 7.6 million direct TV customers.

The merger could fit well with Vodafone Germany's plan to boost its network speeds on its DSL network. Vodafone Germany already offers 16Mbps broadband to German customers and recently announced plans to boost speeds up to 50Mbps under a network access deal with Deutsche Telekom, which operates a VDSL network that reaches 24 million customers in Germany.

Vodafone intends for Kabel's management to head up the combined group's consumer fixed line business throughout Germany.

Vodafone CEO Vittorio Colao said the deal further its strategy of providing unified communications in Germany.

"German consumer and business demand for fast broadband and data services continues to grow substantially as customers increasingly access TV, fixed and mobile broadband services from multiple devices in the home and workplace and on the move. The combination of Vodafone Germany and Kabel Deutschland will greatly enhance our offerings in response to those needs and is consistent with Vodafone's broader strategy of providing unified communications services," he said in a statement.

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