Vodafone Group mulling Liberty Global deal as UK merger rumours hot up?

1 Dec 2014

With merger and acquisition rumours seemingly hitting fever pitch in the UK market, Bloomberg is reporting that Vodafone Group’s chief executive Vittorio Colao is considering a combination with Liberty Global to create an European fixed and mobile voice, broadband and pay-TV giant worth more than USD130 billion. Citing people with knowledge of the matter, it has been claimed that the British company is holding internal discussions with a view to analysing the likely financial and regulatory hurdles that such a deal might pose, while also considering the likely investor support for a share-based transaction. However, it has been noted that no formal negotiations with Liberty are underway, and as such there remains no guarantee that a deal will be reached, with valuation and regulatory issues likely to be the key obstacles.

Meanwhile, in separate but related news Reuters reported late last week that Vodafone Group could also consider the purchase of alternative British broadband provider TalkTalk, though again no confirmation of discussions regarding such a deal have actually been confirmed.

Talk of such acquisitions come in the wake of reports last week that the UK telecoms market could see a wave of consolidation, with fixed line incumbent BT said to be examining a possible purchase of one of either mobile market leader EE or O2 UK, the local unit of Spain’s Telefonica. Further, it has been suggested that Hutchison Whampoa, owner of Britain’s fourth largest mobile operator, Hutchison 3G UK, is also preparing a bid for either EE or O2 UK, while private equity funds KKR and Apax are also rumoured to be considering a revival of plans to bid for EE if neither BT or Hutchison should ink a deal with it.