Analysts said the Vodafone-Liberty deal - which also covers Hungary, the Czech Republic and Romania - had been structured to ensure that it will be subject to anti-trust scrutiny at European Union level, not in Germany, increasing its chances of being approved.
The companies have penciled in a mid-2019 completion date for a combination that also includes the Czech Republic, Hungary and Romania.
Liberty Global's management and employees in the acquired regions will "have the opportunity to play an integral role within the combined company", but Vodafone has not committed to no job losses, and in fact is predicting approximately €535m in cost and capex savings per year thanks to synergies between the two companies.
The world's second-largest mobile operator Vodafone has entered into a deal to acquire the German and East European operations of U.S. cable pioneer John Malone's Liberty Global for €18.4 billion ($21.8 billion), in a bid to expand into these markets with a broader range of superfast cable TV, broadband and mobile services.
"This transaction will create the first truly converged pan-European champion of competition", Vodafone Group chief executive Vittorio Colao said. "It represents a step change in Europe's transition to a gigabit society [next generation broadband]".
Vodafone says that it intends to finance the acquisition using existing cash, new debt facilities (including hybrid debt securities) and around €3 billion of mandatory convertible bonds.
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The sale would inject competition into the European sector, helping to drive technology, Liberty Global CEO Matt Fries said. Together, the three CEE companies provide services to 2.4 million unique customers.
Vodafone chief financial officer Nick Read recently hinted the operator was interested in buying out Liberty's stake in the companies' 50:50 Dutch joint venture, and Colao has said United Kingdom operations could be included in future talks. As a result, innovation and investment lag other countries in Europe, impacting customer service, next-generation product deployment and broadband speeds.
Both Vodafone and Liberty Global said they have been considering merging for some time now, and have held talks on it in recent years.
The deal comes after years of on-again, off-again discussions that saw Vodafone agree to buy Liberty Global's Unitymedia, Germany's second-largest cable network.
"It's clear that the transaction would create a monopoly in cable content distribution and a de facto duopoly in fixed-line infrastructure in Germany", Markus Haas said.
A break fee of €250 million will be payable by Vodafone, in certain circumstances, if the Transaction does not complete.