Liberty scans further LatAm M&A in wake of $5.4B CWC buy

Liberty scans further LatAm M&A in wake of $8.2B CWC buy

17 NOV 2015

Liberty Global hailed its $8.2 billion takeover of Cable & Wireless Communications (CWC) as “a watershed moment” for the cable giant’s Caribbean and Latin American ambitions, and talked up future M&A opportunities in the region.

The deal is not a surprise – it was leaked last month and confirmed by both parties.

The offer values CWC’s shares at $5.3 billion, plus Liberty will assume $2.8 billion of the latter’s debt.

CWC, which is headquartered in London, has regional operations in the Caribbean, Panama, Monaco and Seychelles, where it offers bundled pay-tv, internet, mobile and fixed services. It has more than 6.3 million customers, of which 4.1 million are mobile. It claims it is a leader in 10 out of 15 mobile markets.

The UK group will be combined with LiLAC , Liberty’s recently created stock which includes investments in cable businesses in Chile and Puerto Rico.

“The acquisition of Cable & Wireless represents a watershed moment for our recently created LiLAC platform,” said Liberty Global CEO Mike Fries.

The CWC-LiLAC combination will be the leading consumer and B2B communications provider in LatAm and the Caribbean with 10 million video, broadband subscribers, claimed Liberty.

Acquisition hungry
And the US cable giant appears eager for more deal-making in the region.

Liberty talked up the long-term equity value of the new entity on the basis of both organic growth and “further consolidation opportunities throughout Latin America and the Caribbean”, a sign of potential deals to come.

Elsewhere in its statement on the CWC deal, the US giant said: “Liberty Global believes that the combined businesses of LiLAC and CWC will be well-positioned to exploit the fragmented telecom and pay television landscape” via M&A opportunities.

Regional rivals include Digicel and Millicom, as well as heavyweights Telefonica and America Movil.

The current takeover is subject to Liberty Global and CWC shareholder approval. However, it already has the support of John Malone, Liberty Global’s largest shareholder who also owns 13 per cent of Cable & Wireless following its $3.3 billion acquisition in March this year of Columbus International, a Caribbean and Central American telecoms firm.

Two other former Columbus executives, John Risley and Brendan Paddick, own an additional 23 per cent of equity in CWC, and are in support of the sale to Liberty.

The deal also requires regulatory approvals and court sanction of the scheme of arrangement.

Author

Richard Handford

Richard is the editor of Mobile World Live’s money channel and a contributor to the daily news service. He is an experienced technology and business journalist who previously worked as a freelancer for many publications over the last decade including...

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