Saturday 21 July 2018

Vodafone confirms takeover talks for Liberty Global European assets

Vodafone said it was not looking at combining the two firms.

Vodafone outlook
Vodafone outlook

By Kalyeena Makortoff, Press Association City Correspondent

Vodafone has moved to quash media speculation of a major takeover, saying it is in early stage discussions regarding the acquisition of just some of Liberty Global’s European assets.

The announcement comes after rumours that Vodafone was considering a full-blown merger with the firm – a point it clarified on Friday.

“Vodafone confirms that it is in early stage discussions with Liberty Global regarding the potential acquisition of certain overlapping continental European assets owned by Liberty Global,” Vodafone said in a statement.

“There is no certainty that any transaction will be agreed, nor as to the terms, timing or form of any transaction.

“Vodafone is not in discussion with Liberty Global regarding a combination of both companies.”

The news comes nearly two years after the two firms sealed a deal to merge operations in a joint venture that would bring together Vodafone’s mobile operation with Liberty Global’s Ziggo broadband network.

Liberty Global is controlled by US cable tycoon John Malone, although it is focused on Europe.

Vodafone was one of the biggest risers on the FTSE 100 on Friday, up 2.38% or 5.1p at 219.5p.

But the company said earlier this week that its existing joint venture with Liberty Global had been weighing on top-line growth.

The telecoms company on Thursday reported a 3.6% fall in third quarter revenues to 11.8 billion euros (£10.3 billion) for the three months to December 31, after a drop in its European and Africa, Middle East & Asia Pacific (AMAP) divisions, which fell 2.8% and 5.6% respectively.

The decline was pinned on the “negative impact from the deconsolidation of Vodafone Netherlands” following the creation of its joint venture VodafoneZiggo, as well as foreign exchange rate movements.

Stripped of those impacts, organic service revenues grew 1.1% to 10.2 billion euros (£8.9 billion) but still marked a slowdown from 1.3% growth in the previous quarter.

Growth in its European business also slowed due to the “drag” from regulation and UK handset financing, Vodafone said.

But it added that quarterly trading was in line with expectations and reiterated forecasts for a 10% jump in full-year underlying earnings to between 14.75 billion and 14.95 billion euros (£12.9 billion to £13 billion), on an organic basis.

Press Association

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