Liberty Global and Vodafone reportedly close to finalising deal

Talks between Liberty Global and Vodafone over the transfer of assets in Germany and central Europe to the latter are in the final stages and a deal could be agreed in the next two weeks, according to the Financial Times.

According to the FT, citing unnamed sources, Vodafone is closing in on the elusive deal with Liberty, which could be worth up to €16.5 billion.

An agreement that gave Vodafone control of Unitymedia, Liberty Global’s German cable unit with networks spanning North-Rhine Westphalia, Hesse and Baden-Württemburg, would mean that a huge part of Vodafone’s profits and revenue would be generated in Germany.

An agreement has proved elusive, with Liberty Global and Vodafone placing diverging values on their respective assets. Industry analysts will be closely watching the terms of any deal.

An agreement also may face regulatory hurdles in Germany. Vodafone CEO Vittorio Colao and Deutsche Telekom CEO Timottheus Höttges have already been involved in a testy exchange over the latter’s stated opposition to a deal.

A previous Liberty Global attempt to consolidate the German cable market by acquiring Kabel Deutschland, the operator now controlled by Vodafone but previously owned by Deutsche Telekom itself, came unstuck when antitrust watchdogs nixed the deal.

The regulators may be less concerned than previously about cable operators’ individual market share, but cable’s grip on the supply of fixed services including TV to the housing association market may prove a potential sticking point.

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