Deutsche Telekom (NYSE: DT) Austrian subsidiary T-Mobile Austria acquired UPC Austria, which is currently part of the cable empire of Liberty Global Inc (Nasdaq: LBTY). The specific amount of the transaction is about 1.9 billion euros (about 2.25 billion US dollars). Integration costs about 080 million euros. The merger will enable T-Mobile to unite its Austrian nationwide 4G network with Austria's leading cable operators to become a provider of broadband, mobile and fixed communications, television and entertainment products.
UPC Austria has an annual revenue of approximately 342 million U.S. dollars and UPC has 654,000 customers, including 513,000 broadband users, 450,000 voice services, and 468,000 video services. It is estimated that the combined company's revenue in 2017 will reach 1.2 billion euros. Some commentators believe the deal is part of Liberty Global's restructuring process that will eventually allow it to negotiate a potential large merger with Vodafone. This is another consolidation announcement announced by DT after Dutch T-Mobile announced a merger with Tele2 Netherlands this week.
Srini Gopalan, Board Member of Deutsche Telekom AG, said: "Deutsche Telekom is taking a major step towards our strategy of making Deutsche Telekom a fully integrated operator in Europe, and the acquisition of a wired network will perfectly match our mobile network. This will benefit our customers, whether they are fixing or moving their products and services, and we see the huge potential for growth in the Austrian market.