Liberty Global/Vodafone talks ongoing but scope still limited to CEE
17 APR 2018
Talks between Vodafone [LON:VOD] and Liberty Global [NASDAQ:LBTY] are going well, but remain limited to Central and Eastern European (CEE) assets, it is understood.
Vodafone confirmed in February it was in early-stage talks regarding “continental European assets” owned by Liberty.
Speculation soon began that talks would shift to previously-explored asset swaps, with Vodafone exchanging its UK and Dutch businesses for Liberty’s in Germany and the Czech Republic. At the end of February, Vodafone CEO Vittorio Colao was quoted as saying “we might also look at the UK”.
As it stands, Vodafone is looking to purchase Liberty’s Unitymedia in Germany, UPC Hungary and UPC Czech Republic, it is understood. This is still achievable, it was said.
The UK businesses are so far not included in the assets on the table, ruling out an asset swap structure, it is understood. An asset swap had been the preferred plan, a source briefed on the matter said.
It is still unclear whether Vodafone will sell its stake in VodafoneZiggo, its Dutch JV with Liberty, it was said. The sale of the Dutch JV stake would help it pay for the Liberty businesses, it was noted. The three CEE assets could cost Vodafone USD 20bn, one sector banker estimated.
There is also still uncertainty around whether a tie-up between Unitymedia and Vodafone Germany would be blocked by merger control regulators, it was said. Colao had to defend the potential deal after rival operator Deutsche Telekom’s [ETR:DTE] CEO Tim Hoettges said it would be “totally unacceptable” from a competition standpoint.
Liberty Global declined to comment. Vodafone did not respond to requests for comment.