Thursday, 27 April 2017

Vodafone UK, Liberty global merger talks back on

By Nick Wood, Total Telecom
Thursday 16 March 17

Report claims Voda could sell its domestic business to Virgin Media parent.

Vodafone and Liberty Global have allegedly restarted talks to merge their U.K. businesses, it emerged late on Wednesday. Unnamed sources cited by The Register said that negotiations between senior executives at each company are being held at Vodafone's Newbury headquarters…

Vodafone and Liberty Global have allegedly restarted talks to merge their U.K. businesses, it emerged late on Wednesday.

Unnamed sources cited by The Register said that negotiations between senior executives at each company are being held at Vodafone's Newbury headquarters.

Vodafone and Liberty Global last held talks about potential asset swaps in 2015; however, the two sides walked away after allegedly struggling to draw up a deal structure that would appeal to shareholders.

Since then though, Vodafone and Liberty Global have successfully combined their respective Dutch operations into a joint venture. The deal was completed in late 2016.

Vodafone and Liberty Global are now said to be considering a similar deal in the U.K.; however, one arrangement also being discussed, according to The Register, could see Vodafone sell its domestic business to Liberty Global, which would then combine it with its U.K. arm, Virgin Media. As part of the deal, Liberty would sell its German operation to Vodafone.

Merging with Virgin Media would give Vodafone's U.K. fixed-line ambitions a much-needed boost. The telco re-entered the home broadband market in 2015, and by the end of last year it had attracted fewer than 200,000 subscribers. Meanwhile, its plans to launch a TV service have been put on hold.

A deal between the two would also strengthen Virgin Media's presence in the mobile market. The cableco's MVNO arm is well established, but it is also a relative newcomer to the 4G market, having only launched services last November.

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