Feb 13, 2018

Vodafone and Liberty Global set the consolidation ball rolling

John Malone, the US billionaire who controls European cable company Liberty Global, once described a potential tie-up with Vodafone as like trying to get a banana out of a jar. The companies have in recent weeks reopened talks over an acquisition of some of Mr Malone's prize assets in continental Europe, raising questions over the future of Liberty Global. The sale of assets in Germany and parts of eastern Europe could trigger a series of secondary deals as Liberty Global reshapes itself. Liberty Global's European strategy has been primed for a rethink ever since the company revealed plans to spin out its Latin American assets, known as Lilac, last year with a view to consolidating that market, say people briefed on the company's thinking. Stéphane Beyazian, an analyst with Raymond James, calculates that Liberty Global's German cable company UPC is valued at £12bn while Vodafone's stake in the Dutch joint venture is worth £11bn-£12bn. Such manoeuvring could finally get Mr Malone's "Big banana" out of the jar and transform Liberty Global into an integrated telecoms player in the Benelux markets with options in the UK, Poland, Switzerland and Slovakia.

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