Vodafone and Liberty Global in asset swap talks

Vodafone Cardiff Exter

Vodafone has confirmed it is in the early stages of talks about swapping assets with Europe’s largest cable company, Liberty Global, but the British mobile operator said a merger was not on the table.

Speculation that Vodafone might combine with the Nasdaq-listed owner of Virgin Media to create a £100bn telecoms titan had reached new highs this year. Last month, Liberty’s chairman, John Malone, said Vodafone’s European mobile networks would be a “great fit” with his own cable assets.

In a statement released on Friday morning following an overnight report by Bloomberg, the UK group said: “Vodafone confirms that it is in the early stages of discussions with Liberty Global regarding a possible exchange of selected assets between the two companies.

“There is no certainty that any transaction will be agreed, nor is there certainty with respect to which assets will ultimately be involved. Vodafone is not in discussions with Liberty Global concerning a combination of the two companies.”

Malone identified Germany, the UK and the Netherlands, where Vodafone is the second largest mobile phone company, as a particularly good fit in an interview last month. But he indicated that Liberty had no interest in the mobile operator’s businesses in India and South Africa.

The UK, Ireland, Germany and the Netherlands account for 40% of Vodafone’s sales and earnings and almost three-quarters of Liberty’s, which owns 12 networks in Europe. Analysts at Berenberg bank said Vodafone could raise £30bn by selling its Africa, Middle East and Asia-Pacific division to make a Liberty merger possible.

Malone said last month: “We’ve looked at that from our side and there would be very substantial synergies if we could find a way to work together or combine the companies with respect to western Europe.”

Vodafone shares rose sharply in early trading this morning, before investor disappointment at the lack of discussions about a full-scale merger sent the stock tumbling 2% to 243p.

Powered by Guardian.co.ukThis article was written by Juliette Garside, for theguardian.com on Friday 5th June 2015 10.50 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010


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