Vodafone mulling Liberty Global acquisition

Vittorio Colao, Vodafone

Vodafone is mulling an acquisition of Liberty Global among other potential acquisitions, according to Reuters, citing five unnamed sources with knowledge of the matter.

Vodafone’s interest in Liberty Global, which owns UK cable operator Virgin Media, has been accelerated by the likelihood of consolidation in the UK market, following last week’s news that BT is in talks to buy either EE from Deutsche Telekom and Orange, or Telefónica’s O2.

According to Reuters, Vodafone is also mulling the acquisition of TalkTalk as a possible alternative in the UK market, but Virgin Media, with its extensive high-speed fibre network, is seen as a bigger prize.

Any deal could face regulatory attention, notably in Germany, the UK and the Netherlands. Vodafone already owns Germany’s leading cable operator Kabel Deutschland and Germany regulators have been resistant to further cable consolidation. Liberty owns the second largest cable operator in the country, Unitymedia KabelBW.

Vodafone has been linked with Liberty Global previously this year. In September CEO Vittorio Colão said that Vodafone could acquire the pan-European cable giant at “the right price” and would consider a “transformational” M&A deal in the longer terms, leading Liberty Global’s stock to rise in value.

Liberty Global have has a market value of about US$40 billion (€32 billion) and a similar amount of debt. However Vodafone has a large amount of cash at its disposal following its sale of its stake in Verizon Wireless in the US.

Separately, the Telegraph newspaper has reported that Vodafone is looking to acquire Tesco’s Blinkbox OTT TV business, which the supermarket chain is looking to sell.

According to the paper, the pair are in detailed talks and other parties have pulled out of the bidding. Vodafone is not expected to pay a large amount for the video streaming service, which Tesco has reportedly been considering shutting down. Tescoshut down its free video streaming service Clubcard TV in October.