M&A

Liberty Global to Buy Cable & Wireless for $5B

The deal will add "significant scale" to Liberty's operations in the Caribbean and Latin America, where the company will have 10 million subscribers.
Matthew HellerNovember 16, 2015

The international wing of John Malone’s cable empire has agreed to buy Cable & Wireless Communications for $5.3 billion, positioning Liberty Global for growth in the Caribbean and Latin America.

Cable & Wireless’s operations include television, broadband, mobile and land line telephone services — the so-called “quad play” — in the Caribbean, Panama and the Seychelles. According to The Wall Street Journal, Liberty Global has been “keenly focused on the need to offer a ‘quad play’ eventually in all the company’s territories.”

The combined company will have 10 million subscribers in the Caribbean and Latin America.

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The acquisition of Cable & Wireless “will add significant scale and management depth to our fast-growing operations in Latin America and the Caribbean,” Liberty Global’s chief executive, Michael T. Fries, said Monday in a news release.

Including Cable & Wireless’s outstanding debt, the deal is valued at $8.2 billion. Liberty Global said it had offered $1.32 for each Cable & Wireless share, a premium of roughly 40% on the stock price before takeover talks were first disclosed in October.

Liberty Global has been on an acquisition spree as it seeks to build an international media and cable powerhouse, buying, among others, the U.K.’s Virgin Media and Dutch cable operator Ziggo NV. The deals have made Liberty Global the largest cable operator in the world by subscribers, with 27 million customers across 14 countries.

But The New York Times reports that “as European regulators increasingly frowned on further consolidation in the region’s telecom sector, Liberty Global shifted some of its focus to Latin America and the Caribbean.”

In the summer, the company created a new tracking stock called LiLAC to “exploit organic growth potential” of its operations in Latin America and the Caribbean.

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

Malone is Liberty Global’s chairman and largest voting shareholder with a 24% stake. He also owns 13% of Cable & Wireless as a result of its acquisition of Columbus International, in which he had a stake.

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