Vodafone is interested in Liberty Global’s “overlapping continental European assets”

Vodafone Group on Monday acknowledged reports the company” in early stage discussions with Liberty Global regarding the potential acquisition of certain overlapping continental European assets owned by Liberty Global.”

The two companies have been down this road before. In June 2015, Vodafone called off “discussions…regarding a possible exchange of selected assets between the two companies.” Vodafone, in a statement, said, “There is no certainty that any transaction will be agreed, nor as to terms, timing or form of any transaction.” A merger is “not in discussion.”

Vodafone operates in Europe, Africa, the Middle East and the Asia Pacific region; it provides voice, data and fixed telecommunications services. Liberty Global, based in Denver, Colo., and owned by John Malone, operates in 12 European countries with brands Virgin Media, Unitymedia, Telenet and UPC. In terms of market overlap, which Vodafone highlighted as the crux of the discussions, both companies provide services in Germany, Czech Republic, Romania and Hungary. The two are part of joint venture VodafoneZiggo in Netherlands, which provides fixed and mobile services.

As telecommunications service providers look to grow their business, there’s been an increasing focus on service providers tie-ups with cable companies and content providers. AT&T, for instance, acquired DirecTV allowing it to expand its network and customer base, while also taking ownership of content to deliver over those networks. Similarly, AT&T is now working to finalize its acquisition of Time Warner despite an objection from the U.S. Department of Justice; that matter goes to court in March. Just on the network side, Sprint has entered into agreements with Cox and Altice to leverage the cable company networks to further densify the Sprint mobile network.

Last year at the SCTE Cable-Tec Expo, Liberty Global CEO Mike Fries discussed how traditional cable companies are looking beyond fixed networks to a new age where broadband connectivity can open up new business opportunities in a market colored by increasing competition from more traditional wireless service providers and over-the-top and webscale players.

“It’s not longer just the fixed network,” Fries said in a conversation with Tony Werner, Comcast’s president of technology and product. “Connectivity is the foundation of everything we do,” Fries continued. “We’re heavily invested in mobile. Mobile, for us, is a really important product. If you look at Europe, it’s a quad-play market already. Unlike the U.S., the national incumbent telcos there have national fixed and national wireless coverage. Why wouldn’t you sell that? We’re all in on mobile.”

 

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