UnitedGlobalCom Makes Major Broadband Deal with Liberty
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[London, ENGLAND] UnitedGlobalCom has signed a major broadband deal with Liberty Media Corporation that brings Liberty's European and Latin American broadband assets to United for a combination of cash and shares.
United is paying $200 million cash and 75.3 million Class B shares for the broadband interests, among which is a 25 percent stake in U.K. cable operator Telewest Communications plc which now goes to United's subsidiary UPC. As a result, United's stake in UPC goes up from 51 to 61 percent.
Among a rich and varied bag of Latin American interests transferred to United in the deal are a 28 percent stake in Cablevision S.A. of Argentina, 100 percent of regional programming distributor Pramer, 40 percent of sports program maker Torneos y Competencias, and the Latin American operations of the Gems Network.
In addition, United gets other distribution assets, including 49 percent of Puerto Rico-based Liberty Cablevision, 41 percent of Mexican wireless broadband provider Grupo Portatel, and 43 percent of Digital Latin America -- the Motorola, Hicks Muse joint venture to build a digital satellite distribution platform.
With its substantial new shareholding in United, Liberty will appoint four out of 12 representatives to the United board.
Gene Schneider, chairman and chief executive of United, said the whole transaction achieved his company's objectives by expanding UPC's footprint to include the U.K. broadband market while significantly increasing United's presence in Latin America.
Liberty's President Robert Bennett said the goal had always been the attainment of scale in the business of broadband distribution.
"With scale, broadband distribution assets can be very attractive in their own right and they also can serve as a platform for the creation of content assets. This transaction is a unique opportunity for us to greatly expand the scale of UGC's operations and to become the largest shareholder of that dynamic company," said Bennett.
United's Schneider described the U.K. as being Europe's most advanced broadband market, one in which Telewest is the leading integrated broadband communications company.
Recently, Telewest acquired content provider Flextech plc, the BBC's commercial pay TV partner.