Liberty Global to buy German cable firm

The parent firm of UPC Ireland, Liberty Global, is to buy Unitymedia GmbH, the second-largest German cable network company, for an equity purchase price of €2 billion to expand its European footprint.

Along with Unitymedia's reported net debt at September 30th of about €1.5 billion, the total consideration is about €3.5 billion excluding transaction costs, the company said in a statement.

Unitymedia is owned by a group of shareholders led by BC Partners and Apollo.

Liberty Global said it is looking at debt financing on Unitymedia's business for about €2.5 billion and plans to use the proceeds to refinance the German company's existing debt and fund a portion of the equity consideration.

The remaining equity purchase price would be funded by a combination of existing liquidity, proceeds from the sale of $750 million in convertible notes and the sale of six million Series A and C shares to SPO Partners & Co for about $128 million, Liberty said.

Liberty Global, which is controlled by US cable pioneer John Malone, is active in Europe, including Austria, the Netherlands, Poland, Hungary and Romania as well as in Japan, Chile and Australia.

The transaction is expected to close in the first half of 2010.

Liberty Global has about 17 million customers in 14 countries mainly located in Europe, Japan, Chile, and Australia.