Liberty Global and Vodafone completed their 50:50 joint venture on 31 December 2016, calling the new company VodafoneZiggo Group Holding. The new integrated competitor counts 5 million mobile customers and 10 million fixed RGUs, generating annual revenue of over EUR 4 billion. It expects to launch soon its first integrated fixed-mobile products, while keeping the Ziggo and Vodafone names in the market.
While Vodafone was forced to sell its fixed activities in order to gain regulatory approval for the deal, the companies still expect around EUR 3.5 billion in synergies from the merger. However, the source of synergies has changed compared to the original announcement in February. The opex/capx synergies are now expected at EUR 210 million in 2021, down from EUR 280 million previously. This is due in part to the sale of Vodafone's fixed activities, which were cash flow negative. Integration costs are expected to reach EUR 280 million, down from EUR 350 million previously. Revenues synergies are estimated at at least EUR 1 billion.
Following the recapitalisation of VodafoneZiggo for EUR 2.8 billion and including the equalisation payment under the terms of the deal, Liberty Global receives at closing EUR 2.2 billion and Vodafone EUR 0.6 billion in cash. Vodafone's payment to Liberty was lowered to EUR 0.8 billion from EUR 1.0 billion due to the extra debt taken on by the new company. Its leverage remains within the targeted range of 3.5-5.0x. VodafoneZiggo will also pay the parents for services, estimated at EUR 211 million in 2017. Neither company will consolidate the venture.
