Liberty Global acquires Cable & Wireless |18 May 2016

Cable & Wireless Communications, one of the oldest names in British corporate history, is no more.

On Monday, Liberty Global completed the acquisition of the Miami-based business to bolster its Latin American operations, bringing in businesses across the Caribbean, Panama and Seychelles.

The transaction is valued at approximately £3.5 billion4 (US $7.4 billion3) on an enterprise value basis.

According to reports, the Cable & Wireless Communications (CWC) business will be attributed to Liberty’s Latin American and Caribbean group (the “LiLAC Group”), which trades on the NASDAQ Global Select Market as a tracking stock of Liberty Global under the ticker symbols LILA and LILAK. The combination of CWC and the LiLAC Group creates the leading consumer and business-to-business (“B2B”) communications provider in the Latin America region. These operations will serve 10 million video, voice, broadband and mobile subscribers in more than 20 countries, are expected to generate over $3.5 billion of revenue on an annual basis, and will become the leading platform for further consolidation in Latin America and the Caribbean.

Cable & Wireless Communications can trace its history back to the British telegraph companies of the 1860s, although its reputation took a knock in more recent years as part of a wider group that was criticised for a controversial executive incentive scheme. CWC was demerged from the group in 2010.

Liberty, which is controlled by cable billionaire John Malone, is considering distributing shares of the tracking stock for its Latin American business to shareholders. It is paying £3.5bn but also assuming about £1.8bn of debt for CWC.

Its chief executive Mike Fries said: “This is a big moment for us and I couldn’t be more excited about the potential. We are joining two high-growth businesses in a region that is both underpenetrated and underserved in broadband, mobile data and pay-TV services.”

Phil Bentley, chief executive of CWC, will stand down from the group. He will be replaced by John Reid, previously president of CWC’s consumer business, as interim chief executive.

Andrea Salvato, chief development officer for Liberty, said: “Cable & Wireless is a high growth business in its own right. This transaction significantly increases our scale in the region and provides a great platform for future network investments and product innovation.”

Seychelles NATION hopes to bring you in one of its future editions details about how the acquisition will affect Cable & Wireless Seychelles.