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S&P revises Vodafone outlook after Liberty Global deal

S&P Global Ratings on May 14 revised its outlook on Vodafone Group PLC to negative from stable, while affirming its BBB+ long-term issuer credit rating.

The outlook revision follows the U.K.-based telecom group's announcement that it struck a deal to buy Liberty Global PLC's operations in Germany, the Czech Republic, Hungary and Romania for €18.4 billion, of which €10.8 billion will be paid in cash.

S&P expects an increase in the company's adjusted leverage at the closing of the acquisition to 3.2x-3.5x. This depends on the rating agency's treatment of Vodafone's planned hybrid debt securities and the group's operating performance over the next 12 months.

The rating agency believes the proposed acquisition will improve Vodafone's competitive advantage, notably in Germany, where it will significantly increase its cable coverage in the market.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this news brief can be found here.