Liberty Global to pay $5.3B for Cable & Wireless

John Malone's European telecom giant, Liberty Global, will pay $5.3 billion to acquire U.K.-based Cable & Wireless.

The purchase agreement culminates speculation that began in October, when the two sides confirmed talks. Through the purchase, Liberty greatly enhances its presence in the Caribbean and Latin American market. Cable & Wireless's operations cover TV, broadband and mobile.

"The acquisition of Cable & Wireless represents a watershed moment for our recently created LiLAC [tracking stock] platform," said Mike Fries, CEO of Liberty Global. "It will add significant scale and management depth to our fast-growing operations in Latin America and the Caribbean, while creating a new regional consumer and B2B powerhouse. Upon completion, the combined business will serve 10 million video, data, voice and mobile subscribers, with leading positions across multiple markets."

Under terms of the deal, Liberty Global will give $1.32 for each Cable & Wireless share, including a one-time 4.5-cent dividend that's paid when the transaction closes. 

Malone has spent more than $50 billion over the last decade acquiring cable companies across Europe. He is now turning his attention to Latin America in acquiring Cable & Wireless, a company with roots that date back to 1852.

Malone was already a shareholder in the company, following Cable & Wireless' purchase of cable company Columbus International last year. As part of that agreement, Malone and Columbus' two founders were given a 36 percent stake in the combined company. 

"With our long track record of strong operational and financial performance in the region, we are confident that this combination will yield substantial synergies and accelerate our current prospects for the LiLAC Group to low double-digit rebased OCF growth over the medium term," Fries added. "Our high-quality networks and commitment to product innovation will provide the foundation for growth and value creation for both Liberty Global and LiLAC shareholders."

For more:
- read this Liberty Global press release
- read this New York Times story
- read this Bloomberg story

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