Liberty Global Inc. (LBTYA), a leading cable operator in Europe, Latin America, and Australia, has decided to divest its operations in Australia. Liberty Global holds 54% stake of Austar United Communications Ltd., a leading pay-TV service provider in Australia. Yesterday, Austar announced that Liberty Global and Foxtel, the largest pay-TV operator in Australia, have entered into a definitive agreement whereby Foxtel will acquire 100% stake of Austar for approximately $2 billion. Liberty Global will get around $1.08 billion through this divestiture.
Foxtel is jointly held by Australian telecom giant Telstra, News Ltd., a division of News Corp. (NWSA), and Consolidated Media Holdings. All these three shareholders agreed to the deal. However, the proposed acquisition still needs to clear the Australian regulatory hurdles and the minority shareholder approval of Austar.
From April 2011, the industry circle was ripe with the rumor that Liberty Global may exit from Australia and Financial Times was the first to report this possibility. Disinvestment of Austar indicates that Liberty Global will concentrate solely on Europe and some parts of Latin America. In March 2011, the company won the auction to purchase Kabel Baden-Wuerttemberg GmbH & Co KG, the third largest cable operator in Germany for approximately $4.5 billion. The deal is expected to be closed in the second half of 2011, subject to the regulatory approval.
From early 2010, Liberty Global is gradually concentrating on strengthening its foothold in Europe through a series of mergers and acquisitions. In January 2010, it acquired UnityMedia GmbH, the second largest cable operator of Germany. In December 2010, Liberty Global entered into an agreement with London-based private equity firm Mid Europa Partners LLP to acquire 100% stake of Aster Sp. Z.o.o. for around $805 million. Aster is the fourth largest cable TV operator in Poland.
In April 2011, the Financial Times reported that Liberty Global may make a bid for Ziggo, the largest cable operator in Netherlands. Liberty Global itself is the second largest cable TV operator in Netherlands. Therefore, acquisition of Ziggo will virtually create a monopoly in the Dutch cable TV market.
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