Malone's New Liberty Global
(Liberty Media owns a large percentage of Japan's biggest cable operator Jupiter Telecommunications)
The cable entrepreneur combines his cable company with UnitedGlobalCom to expand across Europe and Japan.
June 16, 2005
Cable king John Malone is spending $3.5 billion to combine Liberty Media International and UnitedGlobalCom to create one of the largest broadband outfits outside of the United States, giving the joined company more muscle to go after less-developed cable markets.
In the deal, Mr. Malone? Liberty Media International will acquire the 47 percent of Denver-based UnitedGlobalCom that it doesn? already own, forming a new company called Liberty Global. The new company will serve 11 million customers in 18 countries, said Chief Executive Mike Fries. Its headquarters will stay in Englewood, Colorado.
?s our operations in Europe, Japan and Chile have demonstrated over the last five years, the broadband video, voice and data business outside the U.S. is a fantastic growth story,?said Mr. Malone, who will act as Liberty Global? chairman.
The deal closed late Wednesday after shareholders of UnitedGlobalCom and Liberty Media approved it. Liberty shares, which will continue to trade under the LBTYA symbol, rose $0.46 at $44.84 in recent trading. UnitedGlobal shareholders had a choice of $9.58 in cash or 0.2155 of a Liberty Global series A common share, recently worth $9.66.
The consolidation will combine substantial subscribers and assets in Europe and Japan, and help Liberty Global continue to expand in these markets. Liberty Media owns a large percentage of Japan? biggest cable operator Jupiter Telecommunications, and is the largest operator in several European countries, the statement said.
The cable industries in Europe and Asia offer growth potential as the markets are less developed than the U.S. cable industry. Telecom companies in these markets often offer services like VoIP and DSL, which the U.S. cable industry has come to dominate.
Giants like Comcast and Cox control most of the U.S. cable industry, which is one of the largest in the world. There are 73 million basic cable customers in the U.S., and the industry generated $57 billion in revenues last year, according to the National Cable & Telecommunications Association.
Because the U.S. cable industry invested roughly $10 billion several years ago to string high-speed networks to homes, cable is leading the race to offer what is known as the triple play: VoIP, video, and high-speed Internet service. |
