Vodafone Said to Discuss Options Including a Merger With Liberty
2015-06-04 21:22:00.343 GMT
By Manuel Baigorri, Matthew Campbell and Alex Sherman
(Bloomberg) -- Vodafone Group Plc and Liberty Global Plc
are discussing a range of potential transactions, including an
outright merger, amid consolidation in the telecommunications
industry, people with knowledge of the matter said.
The talks are informal and at a very early stage, and an
agreement may not be reached because of the complexity of the
proposed transactions and regulatory concerns, said the people,
asking not to be identified because the deliberations are
private. Management issues, including who would run the combined
company and the role of billionaire Liberty Global Chairman John
Malone, are also a hurdle, two people said.
Other options under discussion include a merger of the
companies’ European businesses as well as a series of asset
swaps, the people said. A merger of the two companies would be
one of the largest deals ever based on enterprise value, with
Liberty Global currently at about $89 billion and Vodafone
closer to $141 billion. Liberty has soured slightly on the talks
in recent weeks, said one of the people.
Representatives for Newbury, England-based Vodafone and
London-based Liberty Global declined to comment.
Facing increasing pressure to maintain profit growth, phone
companies are using acquisitions to expand while cheap financing
remains available. Liberty Global is the largest cable company
in the world and could diversify its products by owning wireless
assets, offering what’s known as a quad-play to customers
including TV, landline phone, broadband Internet and wireless
service.
Evolving Structure
The structure of the deal has been evolving since late last
year. While buying Liberty Global outright was Vodafone Chief
Executive Officer Vittorio Colao’s original idea, more recently
his goal has shifted into acquiring Liberty Global’s western
European assets, one of the people familiar with the matter
said.
As part of a merger of the companies’ European assets,
Vodafone would likely explore a spinoff of its operations in the
Middle East and Africa, one of the people said.
In an interview with Bloomberg News last month, Malone said
a tie-up with Vodafone would be a “great fit” for his cable
empire in western Europe, his first public comments on a long-
mooted combination of the carriers.
He cited the benefits of a merger in markets such as
Germany, the U.K. and the Netherlands.
For Related News and Information:
Vodafone Said to Weigh Liberty Tie-Up as CEO Plots Next Move
Malone Says Liberty, Vodafone Make ‘Great Fit’ in Europe
Top Stories: TOP<GO>
Top Deal Stories: DTOP<GO>
To contact the reporters on this story:
Manuel Baigorri in London at +44-20-3525-4457 or
mbaigorri@bloomberg.net;
Matthew Campbell in London at +44-20-3525-8684 or
mcampbell39@bloomberg.net;
Alex Sherman in New York at +1-212-617-8278 or
asherman6@bloomberg.net
To contact the editors responsible for this story:
Mohammed Hadi at +1-212-617-2914 or
mhadi1@bloomberg.net;
Aaron Kirchfeld at +44-20-3525-8830 or
akirchfeld@bloomberg.net
Elizabeth Wollman
2015-06-04 21:22:00.343 GMT
By Manuel Baigorri, Matthew Campbell and Alex Sherman
(Bloomberg) -- Vodafone Group Plc and Liberty Global Plc
are discussing a range of potential transactions, including an
outright merger, amid consolidation in the telecommunications
industry, people with knowledge of the matter said.
The talks are informal and at a very early stage, and an
agreement may not be reached because of the complexity of the
proposed transactions and regulatory concerns, said the people,
asking not to be identified because the deliberations are
private. Management issues, including who would run the combined
company and the role of billionaire Liberty Global Chairman John
Malone, are also a hurdle, two people said.
Other options under discussion include a merger of the
companies’ European businesses as well as a series of asset
swaps, the people said. A merger of the two companies would be
one of the largest deals ever based on enterprise value, with
Liberty Global currently at about $89 billion and Vodafone
closer to $141 billion. Liberty has soured slightly on the talks
in recent weeks, said one of the people.
Representatives for Newbury, England-based Vodafone and
London-based Liberty Global declined to comment.
Facing increasing pressure to maintain profit growth, phone
companies are using acquisitions to expand while cheap financing
remains available. Liberty Global is the largest cable company
in the world and could diversify its products by owning wireless
assets, offering what’s known as a quad-play to customers
including TV, landline phone, broadband Internet and wireless
service.
Evolving Structure
The structure of the deal has been evolving since late last
year. While buying Liberty Global outright was Vodafone Chief
Executive Officer Vittorio Colao’s original idea, more recently
his goal has shifted into acquiring Liberty Global’s western
European assets, one of the people familiar with the matter
said.
As part of a merger of the companies’ European assets,
Vodafone would likely explore a spinoff of its operations in the
Middle East and Africa, one of the people said.
In an interview with Bloomberg News last month, Malone said
a tie-up with Vodafone would be a “great fit” for his cable
empire in western Europe, his first public comments on a long-
mooted combination of the carriers.
He cited the benefits of a merger in markets such as
Germany, the U.K. and the Netherlands.
For Related News and Information:
Vodafone Said to Weigh Liberty Tie-Up as CEO Plots Next Move
Malone Says Liberty, Vodafone Make ‘Great Fit’ in Europe
Top Stories: TOP<GO>
Top Deal Stories: DTOP<GO>
To contact the reporters on this story:
Manuel Baigorri in London at +44-20-3525-4457 or
mbaigorri@bloomberg.net;
Matthew Campbell in London at +44-20-3525-8684 or
mcampbell39@bloomberg.net;
Alex Sherman in New York at +1-212-617-8278 or
asherman6@bloomberg.net
To contact the editors responsible for this story:
Mohammed Hadi at +1-212-617-2914 or
mhadi1@bloomberg.net;
Aaron Kirchfeld at +44-20-3525-8830 or
akirchfeld@bloomberg.net
Elizabeth Wollman