Altice, Cinven buy Liberty French ops for $1.5 B
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World Markets Analysis
March 24, 2006
By Emeka Obiodu
From Lexis Nexis
U.S.-based cable operator Liberty Global has announced plans to sell its French unit UPC for 1.25 billion euro (US$1.5 billion) in cash to private-equity firm Cinven and cable operator Altice. In a press release, the company said that it had a non-binding letter of intent with Altice and Cinven for the sale of 100% of its French cable business. UPC provides TV, broadband internet and telephone services to about 1.6 million customers in France.
Significance: Given the total takeover of Ypso - a holding company for the cable operations of France Telecom and Canal+ - in February 2006 by Altice and Cinven, the acquisition of UPC by the same parties will usher in an era of consolidation in the French cable TV market. A successful deal will give them near-total control of the market, with a combined customer base of about 4 million. Although that would potentially improve the prospects of cable TV operators in the French broadband market, the challenges ahead remain large. Cable operators serve only about 6% of the market compared to France Telecom, which controls about 50% of the broadband retail market, and Iliad, on 18%.
For Liberty Global, the French exit is in line with its gradual withdrawal from saturated European markets where there are opportunities for higher-than-average growth. Reuters reports that the company is looking for a buyer for its Swedish operations, and that it plans to concentrate on investing in Eastern Europe. Liberty Global has also recently sold its Norwegian operations.