Vodafone CEO says Virgin Media not currently on agenda; Liberty CEO says no further deals just yet
10 MAY 2018
Vodafone [LON:VOD] chief executive Vittorio Colao has said that the FTSE-100 telecoms group is not currently thinking about making an offer for Liberty Global’s [NASDAQ:LBTY] UK cable television business Virgin Media, the Financial Times reported. Virgin Media would fit well with Vodafone’s UK business, the report said. However, Colao said Vodafone has no plans to acquire Virgin Media “for now.”
Vodafone on Wednesday, 9 May announced that it has agreed to acquire Liberty Global’s Unitymedia business in Germany and three smaller Liberty Global businesses in the Czech Republic, Hungary and Romania for GBP 18.4bn (EUR 21.03bn).
Meanwhile, Liberty Global will have EUR 10.6bn (GBP 9.27bn) in cash after the deal with Vodafone is completed, the item said. The item noted speculation that Liberty could pursue deals with the UK-based television broadcaster ITV[LON:ITV] or O2, a UK mobile network operator owned by Telefonica [BME:TEF] or a merger with the Switzerland-based telecoms company Sunrise Communications [VTX:SRCG].
Liberty’s chief executive Mike Fries downplayed the speculation however, saying there is no impending deal and “no drama” regarding mergers and acquisitions. However, he added that the cash proceeds from the Vodafone deal will not be left idle, the report said.
Separately, The Times reported that Deutsche Telekom’s [ETR:DTE] chief executive Tim Höttges said on Wednesday that Vodafone’s acquisition of Liberty Global assets is creating a “preening” “giant” that would skew competition. Höttges said he will try to ensure “fair competition” for Deutsche Telekom’s customers so that the German telecoms group is not disadvantaged.
The report quoted Fries, who disagreed with Höttges, but said he understands that the Deutsche Telekom CEO is concerned about competition. The Vodafone deal has created a “national challenger” to Deutsche Telekom, Fries added.
The item went on to quote Colao, who said Höttges’ comments were “self-serving.”
Fries said Liberty is not planning to sell Virgin Media, The Times reported.
The Daily Telegraph also reported Höttges’ comments, adding that he described the Vodafone deal as “totally unacceptable.” Höttges also warned of a Vodafone monopoly on cable television in Germany and said he doubts that such consolidation is of benefit to democracy.
Colao responded to Höttges’ comments by saying that the Deutsche Telekom CEO is merely trying to maintain his company’s dominance in Germany. Colao added that the Vodafone deal will not impact competition, as the two existing cable networks have no overlaps, so a combination does not lessen consumer choice.
Fries said he had no doubts that the Vodafone deal will secure regulatory clearance, The Daily Telegraph item added.
Link to original source (The Times)