In May of this year, CWC CEO Phil Bentley announced his new strategy to investors, outlining four key areas of focus: Drive Mobile Leadership; Accelerate Fixed-Mobile Convergence; Reinforce TV Offer; and Grow B2B/B2G business. This strategy is underpinned by the announced USD1.05bn Project Marlin capital investment programme.

CWC’s strategy is in line with wider industry trends, where convergence of fixed and mobile networks, increasing content consumption, and significant traffic growth is driving requirements for high bandwidth fixed line networks and TV capabilities.

Operators in Europe and the US, as well as CWC’s competitors, are therefore seeking to build and acquire fixed line (terrestrial and submarine) networks that are best able to handle ever- growing data needs along with new TV capabilities.

The Acquisition is therefore in line with CWC’s strategy and consistent with broader industry trends.

The Acquisition will create an Enlarged Group with greater regional presence, scale and scope with assets and capabilities that the Board believes will reinforce and accelerate the realisation across each of CWC’s four areas of strategic focus, as set out earlier this year.

Mobile leadership

Mobile is the key entry point to consumers. The Acquisition will reinforce
CWC’s mobile leadership in the region, by providing an opportunity to cross-sell
Columbus’ fibre based services to CWC’s mobile customers and improving
CWC’s mobile service through the ability to offload data onto the Enlarged Group’s fixed networks, leveraging improved resilience and capacity.

Increasingly, our customers tell us that they want to stream / cache / download TV content onto their mobile, tablet or laptop devices; this transaction will combine the retail distribution and sales and marketing skills of CWC, with the IP engineering and content skills of Columbus.

Fixed-mobile convergence

The Acquisition will allow CWC to become a leading quad-play provider in the region with a comprehensive and compelling set of converged fixed and mobile services, including mobile, fixed line, high-speed broadband and pay-tv. The Enlarged Group will offer more competitive bundles, access to a superior network and enhanced internet access.

Reinforce TV offering

The Acquisition will increase the scale of CWC’s pay TV offering in the region, adding 5 new pay-tv markets, including Jamaica, and approximately 380,000 new pay-tv customers. In addition, it will enable CWC to leverage Columbus’ strong TV operations and add a comprehensive channel portfolio, with comprehensive content, speeding up the planned market entry in 7 new CWC markets.

Grow B2B/B2G offering

The Enlarged Group will own and operate one of the leading terrestrial fibre and subsea
cable networks in the region, providing best-in-class resiliency and route diversity. The Enlarged Group will benefit from an expanded geographic footprint, specifically in Central and South America, as well as a strengthened product portfolio for business and government customers, and a robust platform for further market expansion.

The Acquisition will also strengthen the management team with highly skilled, experienced and entrepreneurial personalities focused on customer experience excellence and shareholder value creation.

The Board estimates that, as a result of the Acquisition, the Enlarged Group will be able to achieve recurring annualised pre-tax cost synergies of approximately USD85m which are expected to be delivered in full in the financial year 2017/18 and one-time capital expenditure synergies of approximately USD145m in the first three financial years following completion of the Acquisition, with additional revenue benefits also available.

It is currently intended that, following Completion, the Board will maintain the existing dividend policy of 4c per CWC Share.

Source: http://www.cwc.com/assets/uploads/files/IR/Transactions/CWC%20-%20Columbus%20Transaction%20Announcement%206%20November%202014.pdf