September 2014
www.tvbeurope.com
TVBEurope 51 Business Figure 1: European M&A deals from Jan 2013 to July 2014
M&A overdrive A
Under pressure operators in Europe vying for growth go into M&A overdrive, write SNL Kagan analysts Mohammed Hamza (western Europe), and Piotr Gaber (eastern Europe)
protracted recessionary period in Europe has afforded many operators in the communications sector the time and incentive to put their finances in order, while the availability of credit and the mounting competitive pressure for next generation infrastructure rollouts is motivating European service providers to consolidate.
SNL Kagan looked at 47 deals announced since the end of 2012 and found that 27 involved cable, both as buyer and target, the latter representing 75 per cent of cable-related deals (see Figure 1). Cable remains the most fragmented platform in Europe (see Figure 2). Liberty Global and its subsidiaries are driving much of the M&A activity, with 14 transactions since the beginning of 2013, kicking off with the £14 billion acquisition of UK cable operator Virgin Media in February 2013.
SNL Kagan counted 28 M&A transactions from January to August 2014, compared with 19 for all of 2013. Over the two years, 23 of the 47 transactions disclosed the value of their deals,
which amounted to $91.36 billion, with 2013 seeing 54 per cent of the total value.
The already large volume of deals experienced in 2013 did not relent in 2014, peaking with 11 deals in July alone, more than twice the number of communications service provider transactions usually seen in any one year. Previously cautious private equity groups are becoming increasingly
“More deals in 2014 are to be expected and a significant volume of M&A activity going forward is much more likely to materialise in the more fragmented east European markets.”
active as market confidence grows. A number of long anticipated IPOs have also surfaced in 2014. Swedish cable and IPTV operator Com Hem launched an IPO and raised €730 million in June 2014, while private equity firm Altice, owner of French operator Numericable, raised €1.3 billion in January 2014. Ventures into content by operators are rarer. Liberty Global completed the acquisition of a 6.4 per cent share in the UK’s leading commercial broadcaster, ITV, for £481 million in June 2014 and,
Figure 2: Potential for cable consolidation in western Europe by subscribers, as of end-2013
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