On Friday Vodafone Group plc (LON:VOD) was successful in achieving European Commission approval for its $10.43 billion or 7.7 billion euro in acquisition of Kabel Deutschland (KD8Gn.DE), German biggest cable company.
The company acquire German company in order to compete in the most important market against its rivals and to strengthen itself in Europe. The EU authority has said the agreement did not elevate apprehension as it would not significantly modify opposition in the markets where the companies are currently active.
According to the investigation conducted by the commission the activities of the joining parties were mostly harmonizing. Vodafone, which is the world’s second-largest telecoms operator has the main business consists of mobile telephony services, while the company which the company is acquiring Kabel Deutschland mainly provides fixed line telephony, Internet access and cable TV services.
Vodafone settled the sale of its venture in U.S. operator Verizon Communications Inc. (NYSE:VZ) for $130 billion, and now desires to purchase the German Cable Company to expand its business all over the Europe through its fixed-line and television services.
Last week Vodafone said it had purchased 76.48% of the German Firm’s shares, which is more than 75% lowest acceptance condition it had set. Quad-play services which mostly providing broadband, TV, fixed-line telephony and mobile have caught on quickly in markets including Spain and France, but the mostly scrappy German cable market is still far behind from other markets.
This deal will strength the UK Company in the area where rivals are powerless and could enable the company to steal a march on competitors like Unity Media, Deutsche Telekom and Liberty Global’s.
Cable resources have become smarter for consumers who wanting to watch video and TV on various devices, so they have easily provide with internet services at speeds often five folds higher in contrast to opponent server providers from traditional telecom companies. Verizon Communications Inc. (NYSE:VZ) shares dropped -1.50% to $47.78 in last trading session.