The long-expected plan by Vodafone to buy Liberty Global’s cable assets in Germany and parts of Eastern Europe is said to be in the final stages.
The deal could be agreed within the next two weeks, reports the Financial Times with reference to people with direct knowledge of the talks. If it happens, the transaction is likely to be worth as much as €16.5 billion including debt, according to the report.
In February 2018, Vodafone confirmed that it is in early stage discussions with Liberty Global regarding the potential acquisition of certain overlapping continental European assets owned by Liberty Global.
One of the core elements of the deal would be Liberty Global’s German cable subsidiary Unitymedia. By combining the former Kabel Deutschland cable network Vodafone acquired in 2013 with Unitymedia, Vodafone could create a powerful converged fixed-line and mobile operator offering its services nationwide, competing head-on with incumbent telco Deutsche Telekom.
Currently, Vodafone’s German cable network covers 13 federal states with Unitymedia serving the remaining three states. Vodafone and Liberty Global also have overlapping operations in further continental European countries including the Czech Republic, Hungary and Romania.
However, absorbing Unitymedia might not turn out to be an easy operation for Vodafone. Deutsche Telekom has already made it clear that it would oppose the move and called for regulators to block any such deal, arguing that it would create a “monopoly” in parts of the market.
The consolidation in the German market would be the third move by Liberty Global to reorganise its cable assets in German-speaking Europe. In December 2017, the company sold its Austrian cable operator UPC to Deutsche Telekom’s subsidiary T-Mobile Austria.
In March 2018, it emerged that Liberty Global is said to be in talks with local Swiss telco Sunrise Communications Group about a potential partnership to combine and expand their businesses in Switzerland, creating a strong competitor to market leader Swisscom.