- British-based Vodafone will buy some European assets of U.S. cable company Liberty Global for $21.8 billion.
- Critics argue that the deal with hinder competition and regulators may not approve.
- Fries calls the deal a "premium valuation," with a return rate of 11.5 times the 2017 EBITDA.
Liberty Global CEO Mike Fries said his company's $21.8 billion asset sale to Vodafone is just the start of mobile consolidation in Europe.
On Wednesday, British-based Vodafone VOD-GB struck a deal to buy some European assets of U.S. cable company Liberty Global LBTYA , a move the CEO said will benefit both investors and mobile users.
"It's all about scale," Fries told CNBC's " Power Lunch " on Wednesday. "This transaction is about creating a national challenger with converged scale, meaning fixed and mobile scale. It's a natural combination. I think you're going to see that continue, in Europe in particular, both mobile and mobile."
Vodafone, the world's second-largest mobile carrier, operates in Europe , Asia , Africa and Oceania. In the deal, Vodafone is buying Liberty Global's businesses in Germany , Hungary, Romania and the Czech Republic.
But, critics argue that the deal with hinder competition and regulators may not approve. Deutsche Telekom DTE-DE is the largest competitor in Europe.
Fries, however, isn't worried.
"We absolutely anticipate regulatory approval of this deal," said Fries, who also serves as vice chairman of Liberty Global. "It will be approved at the EU level. Not necessarily in Germany or any of the individual markets. That's an important distinction."
The CEO pointed out that Deutsche Telekom DTE-DE — "who we know [in the U.S.] as T-Mobile TMUS " — already dominates the German market, with 50 percent of the country's broadband customers.
And the German market, he said, "has been screaming for consolidation and a real national challenger. So together, Vodafone and our business, Liberty Global, will present a great opportunity for consumers. They're going to see innovation, investment. All kinds of benefits over the long haul."
The strategy will be the same: focus on leveraged equity growth and shareholder return. He calls the deal a "premium valuation" with a return rate of 11 ½ times 2017 EBITDA.
"Which, when you see the cable stocks trading at 7, is certainly a nice valuation for businesses we've owned and built for a decade or more," Fries said.
He also noted that a move like this is not new for the company.
"This is not the first time we've rebalanced or reshaped our platform to sort of optimize growth and optimize shareholder return," Fries said.
"It's a total win for consumers," he said.
More From CNBC