On Thursday, Berlin-based Tele Columbus announced that it would buy the country’s fourth-largest cable TV provider, PrimaCom, for €711 million ($777 million). The firm, Germany’s third largest cable TV operator, said the deal would almost double its own client base to 2.8 million customers.
“The combination of the two biggest German medium-sized providers is pushing competition in the internet and telephony, and premium TV sector,” Tele Columbus said in a statement.
Tele Columbus sold its shares in January at €10 a piece and raised €367 million. It currently has a market value of €716 million.
“The new combined company offers attractive growth potential and enables the company to realize scale efficiencies across the combined customer and network base,” it said.
The two companies combined had sales of €345 million in 2014, still a far cry from the €2.05 billion realized by market leader Unitymedia, which is owned by Nasdaq-listed Liberty Global, and the €2.02 billion of Kabel Deutschland, which is owned by British mobile phone operator Vodafone.
The cable operators offer TV, phone and internet services, pitting them against former phone network monopolist Deutsche Telekom, Frankfurt-listed United Internet, Swedish Tele2 and others.
Tele Columbus shares initially fell on Thursday morning, touching a low of 12.61, but later reversed losses and were up 4.6 percent at €13.20 by 08.17 a.m. (GMT). The firm sold its shares in January at €10 a piece and raised €367 million. It currently has a market value of €716 million.
Tele Columbus will fund the takeover by cash, loans and a share rights issue or a similar equity-like measure in the second half of this year, it said.
Gilbert Kreijger is an editor with Handelsblatt Global Edition in Berlin, covering companies and markets. To contact the author: email@example.com