The UK’s Vodafone Group is in informal discussions regarding a EUR400 million (USD576.6 million) deal to buy the 27% of German fixed-line operator Arcor that it does not already own, reports The Times. The Newbury-based group has approached Arcor’s minority shareholders, German railway operator Deutsche Bahn and Deutsche Bank, about buying their stakes. Deutsche Bahn has talked about a price of up to EUR800 million for the two stakes, but Vodafone’s advisers are thought likely to enter formal negotiations at a price closer to EUR400 million. The move represents a u-turn for Vodafone, which for many years had sought to sell Arcor, which it gained as part of its acquisition of equipment manufacturer Mannesmann in early 2000. Vodafone kept Arcor after deciding it did not need the cash and that it would be a useful tool for entering the broadband arena. Last year the UK operator conceded that as wireless markets matured and converged, and multi-service offerings incorporating fixed line and other technologies became popular, a mobile-only strategy was no longer feasible.
According to TeleGeography’s GlobalComms database, Arcor is Germany’s second largest fixed line telco, with close to 1.5 million telephony subscribers at the end of 2006. It is also the country’s third biggest broadband operator, with an estimated 2.2 million customers mid-way through 2007.