NTL buys Swiss cable firm for $3.7 billion
U.K. television cable company NTL says it agreed to buy Switzerland's Cablecom Group in its continued bid to gain a dominant position in the European cable market.
Cablecom, which is owned by Swisscom, Siemens Schweiz and Veba, is Switzerland's largest cable operator, with about 1.38 million subscribers--or 53 percent of the Swiss cable market.
Today's acquisition is NTL's latest aggressive move to try to seize the rapidly growing and consolidating European cable market.
Earlier this summer, NTL, a U.S.-based Nasdaq-traded company but with most of its assets in Europe, outbid Telewest Communications, one of the United Kingdom's major cable TV companies, for the cable television business of Cable & Wireless Communications. With the C&W acquisition, NTL will be the largest cable operator in the United Kingdom, competing with British Telecommunications and British Sky Broadcasting.
European cable operators are beginning to compete to bring high-speed Internet services to market.
"In terms of our overall European strategy it is particularly important to have acquired a network at the very heart of Europe, and Cablecom is one of Europe's premier communications assets," Barclay Knapp, NTL's chief executive officer, said in a statement.
NTL said that Cablecom recently launched digital television and high-speed Internet services. The company also owns SwissOnline, the second largest ISP in Switzerland.
New York-based NTL will acquire the cable assets of Cablecom together with its subsidiaries. Part of the purchase price will take the form of the assumption or discharge of Cablecom's debts.
The acquisition is subject to certain regulatory reviews and is expected to close some time in the first quarter of 2000, NTL said.
NTL said it has reached agreements with investment banks Morgan Stanley Dean Witter and Chase Manhattan Bank to finance $2.3 billion of the purchase price for the transaction.
Shares of NTL closed 5.62 percent higher on Friday at 119.75. The stock has traded as high as 123 and as low as 40.19 during the past 52 weeks.