|
UPC merges German units
|
 |
March 29, 2001: 6:49 a.m. ET
Dutch cable firm and Germany's PrimaCom to create No. 3 operator
|
LONDON (CNN) - United Pan-Europe Communications and PrimaCom agreed on Thursday to merge their German cable units, giving UPC 52 percent of the new venture.
The two companies didn't release the financial value of the deal.
The merged cable firm will be the third-largest in Germany with some 1.6 million subscribers, and will have the option to acquire an additional 472,000 customers from TeleColumbus, making it the country's No. 2 cable company.
PrimaCom shareholders will exchange their 19.8 million shares for 19.8 million new shares in New PrimaCom, as the company will be called. UPC will receive 11.1 million new shares.
"The transaction will allow greater economic efficiency in the build out and upgrade of our digital platforms," Paul Thomson, chief financial officer of PrimaCom, said in a statement.
Together with its 25 percent stake in PrimaCom, UPC will own 52 percent of the New PrimaCom, which will replace the current PrimaCom listing on both the Frankfurt Stock Exchange and the Nasdaq market in New York.
Shares in UPC, which is 51 percent-owned by Denver, Colo.-based UnitedGlobalCom, fell 3.2 percent to  7.30 in midday Amsterdam trade, cutting its market value to 3.2 billion ($2.8 billion). Microsoft (MSFT: Research, Estimates) also holds 7.9 percent of the company.
PrimaCom shares were up 4 percent at 16.75 in Frankfurt.
As part of the deal, the company will buy Dutch cable asset Alkmaar for 50 million ($44 million) in cash.
The merged company is expected to have earnings before interest, tax, depreciations and amortisation of 88 million, sales of 203 million, and net debt of 880 million, UPC and PrimaCom said.
The deal, which will be presented to shareholders for approval in July, is expected to close in the third quarter. 
|
|
|
|
|
 |
|
