Vodafone on Friday confirmed it is in early talks with Liberty Global about swapping certain assets, but denied the two companies are negotiating a merger.
Rumours have been rife that U.K.-based Vodafone and U.S.-based Liberty were planning to combine their businesses.
The latest came in the form of a Bloomberg report late on Thursday that alleged the companies were holding informal discussions about a range of transactions, including a merger. Sources cited by the newswire claimed Vodafone and Liberty were grappling with several potential issues, such as the complexity of any deals, regulatory concerns, and management structure – including the role of Liberty Global chairman John Malone.
"Vodafone confirms that it is in the early stages of discussions with Liberty Global regarding a possible exchange of selected assets between the two companies," said Vodafone, in a statement on Friday.
"Vodafone is not in discussions with Liberty Global concerning a combination of the two companies," the telco added.
Malone said in an earlier Bloomberg report that he sees a great fit between Liberty Global and Vodafone in the U.K., Germany and the Netherlands, where the companies both operate.
"There’s the promise of creating enormous shareholder value if we could work it out," he said at the time.
Late last year, Vodafone CEO Vittorio Colao played down the possibility of merging with Liberty Global, amid reports claiming he had expressed interest in Liberty’s German asset s.
Since then, a wave of consolidation has swept through Voda’s home market, with U.K incumbent BT agreeing to acquire EE and Hutchison Whampoa agreeing to acquire O2 UK and merge it with 3UK. The dynamics of the U.K. telco sector are also set to be altered by Vodafone’s plan to re-enter the fixed broadband market and satellite TV provider Sky planning to launch MVNO services on O2’s network in 2016.
Liberty Global’s Virgin Media is arguably the strongest quad-play provider in the U.K., but relies on an MVNO deal with EE for its mobile service.
Meanwhile, in the Netherlands, Vodafone offers quad-play services while Liberty Global’s Dutch cable operation UPC is in the final stages of integrating local rival Ziggo and adopting the latter’s brand.
