Liberty Global has agreed to acquire Multimedia Polska, the third largest cable company in Poland, through its subsidiary UPC Polska. The deal is valued at PLN 3 billion ($760 million), but Liberty Global warned that the price may be adjusted downwards due to the operational and financial performance of Multimedia Polska prior to closure. The deal is subject to regulatory approval.
The Polish cable market remains fragmented, even with Liberty Global's purchase of Aster in 2011 through UPC Polska and its bid for Multimedia Polska. The merger is consistent withthe group's recent merger of the operations of UPC Czech Republic and UPC Slovakia in March. According to Severina Pasco, CEO of Liberty Global for Central and Eastern Europe, the merger will speed up the process of introducing new services and create gains in efficiency.
Once UPC Polska incorporates Multimedia Polska’s operations it will be able to compete with the DTH operators more effectively by providing higher quality services. Cyfrowy Polsat and nc+ partly have higher ARPUs and more subscribers thanks to a stronger sports offer. UPC Polska will also need to attempt to reach more remote rural towns. Some DTH customers would prefer a cheaper digital cable TV package or a low-end bundle but do not have the option to purchase one.
In the last 18 months, the subscriber base for Multimedia Polska declined by 3.2% and UPC Polska’s subscriber base only increased by 0.2%. After the merger, UPC Polska will be able to focus on efforts to increase its ARPU, and improve the quality of its offer and IHS Markit expected that it will have a positive impact on the combined subscriber base.