Virgin Media O2 will be the Anchor Wholesale
Client of the Joint Venture in Addition to Providing a Range of
Technical Services
- The Joint Venture will be 50% owned by Liberty Global and
Telefónica, and 50% owned by InfraVia Capital Partners
- The Joint Venture will construct and operate a wholesale
fibre-to-the-home (FTTH) broadband network of up to 7 million
premises that will not overlap with VMO2’s existing
network
- This network, alongside Virgin Media O2’s recently announced
fibre upgrade project, will create a FTTH footprint of up to 23
million premises
- Unique deal combines the three partners’ infrastructure and
financing expertise and UK operating experience, whilst leveraging
VMO2’s industrial scale and network construction know-how
- The Joint Venture will have exclusive access to VMO2’s
construction expertise and substantially all new build activity at
VMO2 will be migrated going forward
- Transaction expected to close by the end of 2022
- Will accelerate FTTH deployment in the UK, with
approximately £4.5 billion investment supported by £3.3 billion of
fully underwritten financing commitments and up to £1.4 billion in
equity commitments
Liberty Global plc (“Liberty Global”) and
Telefónica Infra, S.L.U, a wholly owned subsidiary of Telefónica,
S.A. (“Telefónica”), together with InfraVia Capital Partners
(“InfraVia”), a leading independent financial investment firm
specialising in infrastructure and technology investments, have
reached an agreement to set up a new Joint Venture (JV) that will
roll out fibre-to-the-home (FTTH) to greenfield premises across the
country. The partnership will initially roll out fibre to 5 million
homes not currently served by Virgin Media O2’s network by 2026,
with the opportunity to expand to an additional c.2 million homes.
This investment of approximately £4.5 billion will provide a major
boost to the nation’s digital economy and make a significant
contribution to the Government’s gigabit broadband ambitions.
Liberty Global and Telefónica will jointly hold a 50% stake in
the JV through a holding company, with InfraVia owning the
remaining 50%. Telefónica Group’s participation will be held
through Telefónica Infra (its infrastructure unit).
The fibre network will be offering FTTH wholesale access to
telecommunications service providers, with Virgin Media O2 (“VMO2”)
acting as the anchor client, entering into an agreement with the JV
upon closing of the transaction. Coupled with its own fibre
investments to upgrade its existing 16 million premises network,
this will expand Virgin Media O2’s gigabit footprint to around 80%
of the UK upon completion. In addition, the JV will seek to attract
additional third-party wholesale clients. The company will target
homes across the UK, both adjacent to the existing Virgin Media O2
footprint and new areas.
The business plan for the initial rollout of 5 million homes
envisages an investment of approximately £4.5 billion, which
includes investments related to the roll-out, envisaged connection
capex and other related set-up costs. The three partners will fund
their pro rata share of equity funding for the build, up to £1.4
billion in aggregate, phased over 4-5 years. In addition, the JV
has obtained £3.3 billion of fully underwritten debt financing from
a consortium of financing banks. As part of the transaction,
InfraVia will make certain payments to Liberty Global and
Telefónica, a portion of which will be linked to the progression of
the network build-out.
Mike Fries, CEO and Vice Chairman, Liberty Global, comments:
“This landmark agreement with Liberty Global, Telefonica and
InfraVia will expand our FTTH footprint to millions of new UK
homes, creating the undisputed second national fibre network in the
UK. VMO2 has already committed to upgrading its entire existing 16
million footprint to FTTH. This JV will take our aggregate FTTH
footprint to up to 23 million homes, reaching around 80% of the UK.
VMO2 will bring significant build expertise, and will benefit from
a meaningful off-net growth opportunity and as the anchor client
will support attractive returns for the JV – a winning combination.
Finally, we are very excited to be working with InfraVia who we
already partner with in Germany, and welcome the expertise they
bring to the JV.”
José María Alvarez-Pallete, Chairman and CEO of Telefónica
comments: “Telefónica has a recent track record of successfully
developing broadband connectivity in many markets through strategic
partnerships. These deals help each country firmly increase their
competitiveness and digital infrastructure to help their companies
and economy thrive. The UK is, indeed, a growth market for us and
we are very excited to be partnering with InfraVia to accelerate
access to next generation broadband connectivity to a larger number
of UK households and adding to Telefónica Infra’s growing
portfolio. Further to our announcement from earlier this week,
Telefónica Infra is now able to add the UK to its list of countries
with these mentioned FTTP vehicles, with InfraVia joining the top
tier institutions partnered with Telefónica’s operating units in
relevant markets such as UK, Spain, Germany or Brazil.”
Vincent Levita, CEO and Founder of InfraVia comments: “We are
excited to be partnering with VMO2, Liberty Global and Telefónica
to build and operate up to 7 million premises FTTH in the UK. The
combination of our respective expertise in fibre network
deployment, financing and operations in the UK, together with
VMO2’s industrial scale and network construction know-how will be
key to creating the undisputed second national fibre network in the
UK providing access to broadband connectivity to millions of UK
households. InfraVia has been a leading investor in digital
infrastructure for the past decade. Attracted by the long-term
trends of ever-increasing data usage and increased need for home
connectivity, this would represent our 5th investment in fibre
network deployment in Europe through strategic partnerships. We
look forward to working with VMO2, Liberty Global and Telefonica in
this partnership in the years ahead.”
The transaction is subject to customary closing conditions,
including regulatory approval and is expected to close in Q4 2022.
Liberty Global and Telefónica were advised by Barclays and
LionTree, as well as Allen & Overy. InfraVia Capital Partners
was advised by Lazard as well as Linklaters and De Pardieu Brocas
Maffei.
About Liberty Global
Liberty Global (NASDAQ: LBTYA, LBTYB and LBTYK) is a world
leader in converged broadband, video and mobile communications
services. We deliver next-generation products through advanced
fiber and 5G networks, and currently provide over 85 million fixed
and mobile connections* across Europe and the United Kingdom. Our
businesses operate under some of the best-known consumer brands,
including Virgin Media-O2 in the U.K., VodafoneZiggo in The
Netherlands, Telenet in Belgium, Sunrise in Switzerland, Virgin
Media in Ireland and UPC in Slovakia. Through our substantial scale
and commitment to innovation, we are building Tomorrow’s
Connections Today, investing in the infrastructure and platforms
that empower our customers to make the most of the digital
revolution, while deploying the advanced technologies that nations
and economies need to thrive.
Our consolidated businesses generate annual revenue of more than
$7.5 billion, while the VodafoneZiggo JV and the VMO2 JV generate
combined annual revenue of more than $19 billion.**
Liberty Global Ventures, our global investment arm, has a
portfolio of more than 75 companies and funds across content,
technology and infrastructure, including strategic stakes in
companies like ITV, Televisa Univision, Plume, Lionsgate and the
Formula E racing series.
* Represents aggregate consolidated and 50% owned
non-consolidated fixed and mobile subscribers. Includes wholesale
mobile subscribers of the VMO2 JV and B2B fixed subscribers of the
VodafoneZiggo JV.
** Revenue figures above are provided based on full year 2021
Liberty Global consolidated results (excluding revenue from the
U.K. JV Entities) and the combined as reported full year 2021
results for the VodafoneZiggo JV and estimated U.S. GAAP full year
2021 results for the VMO2 JV. For more information, please visit
www.libertyglobal.com.
About InfraVia Capital Partners
InfraVia is a leading independent private equity firm,
specialized in private markets across European infrastructure and
technology investments. InfraVia supports entrepreneurs and
industrial players in their growth and digital strategy,
accelerating their transformation into sizeable platforms. Since
2008, InfraVia has raised €10bn of capital and invested in 45+
companies across 13 European countries.
(www.infraviacapital.com)
About Telefónica
Telefónica is one of the largest telecommunications service
providers in the world. The company offers fixed and mobile
connectivity as well as a wide range of digital services for
residential and business customers. With more than 368 million
customers, Telefónica operates in Europe and Latin America.
Telefónica is a 100% listed company and its shares are traded on
the Spanish Stock Market and on those in New York and Lima
(telefonica.com/en/).
About Telefónica Infra
Telefónica Infra, a fully owned unit of Telefónica Group,
manages stakes in infrastructure vehicles alongside financial
investors. Its objectives include crystallizing the value of
Telefónica’s infrastructure assets and know how, partnering with
leading financial investors to co-invest in growth opportunities
involving flexible partnership structures and business models.
Telefónica Infra’s investment portfolio currently comprises a
50.01% stake in Telxius (telxius.com), a 40% stake in Unsere Grüne
Glasfaser (unseregrueneglasfaser.com), a 25% stake in FiBrasil
(fibrasil.com.br) and a 20% stake in Nabiax (nabiax.com).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220728006120/en/
Liberty Global
Investor Relations Michael Bishop + 44 20 8483 6246 Amy
Ocen + 1 303 784 4528 Michael Khehra + 44 78 9005 0979
Corporate Communications Bill Myers + 1 303 220 6686 Matt
Beake + 44 20 8483 6428
InfraVia Capital
Partners
Vincent Levita | InfraVia - Founder and CEO |
vlevita@infraviacapital.com | +33 (0)1 40 68 17 38 Antoine Denry |
Taddeo | antoine.denry@taddeo.fr | +33 (0) 6 18 07 83 27
Telefónica
Investor Relations Restricted - External Telephone +34 91
482 87 00 Isabel Beltrán (i.beltran@Telefónica.com) Torsten
Achtmann (Torsten.Achtmann@Telefónica.com)
Media Relations Telephone + 34 66 907 73 83 Alex Kowalski
(alejandro.kowalski@Telefónica.com)
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