[London, ENGLAND] U.K. stores group Kingfisher plc and
France’s Europ@Web have agreed to sell their shares
in Liberty Surf Group to Tiscali SpA in a deal that
values the French ISP at US $640 million, it was
announced Monday.
James Kinsella, acting chief executive of Tiscali, said
the acquisition reinforces Tiscali’s leadership position
in the market, making it the largest independent Internet
Service Provider in Europe.
Last month, Tiscali completed a US $4 billion acquisition
of World Online, another pan-European ISP business with
operations in Germany, the U.K., and Spain. Now, with
Liberty Surf and its 0.7 million subscribers across Europe,
Tiscali is in an even stronger position to offer bigger
deals to its advertisers.
Kingfisher, owner of the Woolworths stores in the U.K.,
will be selling its 35 percent stake in Liberty Surf
via its Dutch subsidiary Eijsvogel for US $220 million.
“With the European ISP market now consolidating, today’s
deal enables us to realize this value created for our
shareholders,” commented Kingfisher Chief Executive
Geoffrey Mulcahy.
According to newspaper reports in France, Liberty
Surf was planning to withdraw from markets in the
U.K., Sweden and Spain in order to reduce its spending.
This option will now be under review at Tiscali, but
it seems inevitable that some rationalization will
occur.
Sketchy information about the sale of Liberty Surf
emerged on Friday, after which shares in both
Tiscali and Liberty Surf were suspended. The parties
to the deal issued full information at a press conference
on Monday.
The latest acquisition is another step in the ongoing
consolidation of Europe’s ISP industry. Liberty Surf
itself was on the acquisition trail last year and
purchased U.K. ISP X-Stream at the beginning of 2000.
But the venture has not been a huge success, falling victim
to the unmetered access fiasco that adversely affected
many operators.
The other major move to European ISP consolidation
came in December 2000 when France Telecom-controlled
ISP Wanadoo agreed to purchase Freeserve, the largest
Internet service provider in the U.K. Soon there will
be a battle of the giants, and hopefully some much-needed
improvements in services for the consumer.
