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Vodafone gets support for $10 billion offer for Kabel Deutschland

Telecom major Vodafone has received adequate support for its $10 billion takeover offer for Kabel Deutschland, a cable company in Germany.

Vodafone UK said it secured the 75 percent of shares in Kabel Deutschland needed to succeed in the takeover.

75 percent is the minimum acceptance condition. Vodafone said that it would publish the definitive tender ratio on September 16.

Vodafone’s 87.00 euro per share offer, which includes a 2.50 euro dividend payment, for Kabel Deutschland ended on September 11.

The telecoms service provider earlier this month decided to exit from the U.S. market after selling its stake in Verizon Wireless for $130 billion.

Vodafone wants to buy Kabel Deutschland to offer more television and fixed-line services in Germany, its largest European mobile market.

It said the deal still needed regulatory clearance from the European Commission, with the completion of a first review expected by Sept. 20.

Reuters reported that quad-play services offering TV, broadband, mobile and fixed-line telephony have caught on rapidly in markets such as France and Spain, but the largely fragmented German cable market is still some way behind.

The deal for the cable company could enable Vodafone to steal a march on rivals such as Liberty’s Unity Media and Deutsche Telekom.

According to Vodafone, it expected synergies from the deal to exceed 300 million euros a year before integration costs, by the fourth full year following completion.
It also sees potential for revenue synergies of 1.5 billion euros from cross-selling products and improved customer loyalty.

The high price reflects the desire of the world’s second-largest mobile operator to adapt in its core market of Europe, where increasing regulation and recession have hit revenue and forced it to write down the value of its assets.

editor@telecomlead.com

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