Vodafone to acquire Liberty Global assets

Vodafone acquires Liberty Global assets for EUR 18.4b o/w 10.8 cash, 7.6 existing Unitymedia debt.

• Operations
• DE (Unitymedia; together 25m HP = 2/3)
• HU (1.8m HP = 43%)
• RO (3.1m HP = 41%)
• CZ (1.5m HP = 33%)

• Valuation
• EV EUR 18.4b
• 10.9x EBITDA 2019 (pre synergies)
• 8.6x EBITDA (post synergies 5 yr)
• 12.5x OpFCF (post synergies 5 yr)

• Closing
• To close mid 2019
• Break-up fee EUR 250m payable to Vodafone, or payable to Liberty if for antitrust issue.

• Synergies
• Cost/capex synergies (network integration, IT/billing simplification, procurement, consolidating overlapping functions) 535m EUR/yr from yr 5 (before integration costs)
• NPV EUR 6b (after integration costs) o/w rev synergies NPV EUR 1.5b (from cross-selling)
• Integration cost EUR 1.2b (in first 5 yr).

• Accreditive to FCF from yr 1.

• Increases targeted net debt/EBITDA to 2.5-3.0x (pro forma at high end).

• Liberty Global to provide transitional services to Vodafone (IT, TV platform tech, connectivity, other support) max. 4 yr; pro forma EUR 128m in 2019.