Liberty Global, the US company which owns the UPC cable group in the Netherlands, has made a formal offer for Dutch cable market leader Ziggo.

Liberty Global has already built up a stake of almost 30% in Ziggo and has offered €34.53 a share for the company. That values Ziggo at €10bn.

Both the management and supervisory boards at Ziggo are backing the bid which still needs to be approved by shareholders and the competition authorities.

Jobs

The takeover will have an impact on jobs but it is unclear how many will go. Anselma Zwaagstra of the CNV union federation told news agency ANP he is concerned about the impact of American corporate culture.

‘In the US there is a different approach to discussing with the unions. They do not know the Dutch system of reaching agreement through discussion,’ he said. ‘This worries me.’

The deal will also create a handful of new millionaires on the Ziggo board. Supervisory board chief’s share package is now worth €17.7m while former cheif executive Bernard Dijkhuizen’s shares are worth €11.8m. Chief technology officer Paul Hendrik’s shares are valued at €13m, the Telegraaf reported.

Market

Ziggo was founded over five years ago following the merger of three separate cable operators and has 55% of the Dutch market. UPC has around 35%. Neither company has nationwide coverage and their areas do not overlap.

The rest of the Dutch cable market is made up of four small regional players and 15 or so town-based providers.

In a joint statement, Liberty Global and Ziggo said the ‘combined footprint’ of the two companies would reach 90% of Dutch households. The deal would also create a ‘nationwide cable operator’, the statement said.

Consumers

Experts point out the merger will not be noticed by Dutch households, at least at firms, because consumers currently do not have a choice between the two. UPC operates in Amsterdam while Ziggo is the provider in The Hague.

In the long term, the takeover could lead to improved services as the combined company benefits from synergy benefits and technical advances.

However, the competition authorities could take a closer look at Ziggo’s broadband operations and break up that market, the Volkskrant suggested.

It will be at least March before the competition authorities have given their views on the takeover, the paper said.