Vodafone has earlier mentioned that it is in the early stages of talking with Europe’s largest cable company, Liberty Global. The British mobile company states that it has plans of swapping assets with n the early stages of talks about swapping assets with the US company Liberty Global, which is Europe’s largest cable provider, but the British mobile operator said a merger was not yet discussed.
It was only this year that speculations that Vodafone might combine with the owner of Virgin Media. This was rumored to create a £100 billion telecoms group. Last month, Liberty’s chairman, John Malone, said that its networks would be a perfect fit with their cable assets.
On Friday morning, the UK company said: “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.
“There is no certainty that any transaction will be agreed, nor is there certainty with respect to which assets will ultimately be involved.
“Vodafone is not in discussions with Liberty Global concerning a combination of the two companies.”
Experts have raised the possibility of special transactions that would include a swap of mobile network owners between Virgin Media or Vodafone. And due to this rumored deal, Vodafone shares rose sharply in early trading on Friday. However, before investor disappointment at the lack of discussions about a full-scale merger sent the stock down 2.4% to 242p.
Malone identified several countries that will fit for its company such as Germany, the UK and the Netherlands. These countries are where Vodafone is the second largest mobile phone company. However, Malone said that Liberty had no interest in the mobile operator’s businesses in India and South Africa. The UK, Ireland, Germany and the Netherlands account for 40% of Vodafone’s sales and earnings. These countries are almost three-quarters of Liberty’s, which owns 12 networks in Europe. Liberty has revenues of £12 billion and 38,000 employees serving 27 million customers. On the other hand, Vodafone employs 13,000 in the UK and 53,000 worldwide, with revenues of £42 billion a year, 446 million mobile customers and 12 million fixed line broadband customers.
Malone mentioned last month about the possible merger: “We’ve looked at that from our side and there would be very substantial synergies if we could find a way to work together or combine the companies with respect to western Europe.”
This news of a potential merger came as Vodafone’s annual report showed that its chief executive, Vittorio Colao, has collected a £1.3 million bonus last year, bringing his total pay to £2.8 million. The chief executive’s base salary rose by £30,000 to £1,140,000, his overall remuneration was lower than last year. In 2014, long-term incentive payouts helped boost his earnings to £8m for the year.Vodafone has carefully developed its financial strategies so that the company owed no corporation tax in the UK for the last financial year. Vodafone also recognized £5.5billion of tax losses in 2015 related to its German and Luxembourg operations. These can now be used to reduce its tax in these countries for years to come
About Vodafone Group
Vodafone Group plc is a British multinationaltelecommunications company with headquarters in London and registered office in Newbury, Berkshire.Vodafone is the world’s 2nd-largest mobile telecommunications company based on both subscribers and 2013 revenues and number of subscribers at 434 million as of 31 March 2014. The companyhas subscribers in 21 countries and has partner networks in over 40 additional countries. Its Vodafone Global Enterprise division provides telecommunications and IT services to corporate clients in more than 65 countries. Vodafone is the third-largest of any company listed on the London Stock Exchange. It has a secondary listing on NASDAQ. Vodafone Group stock market evolution: http://www.marketwatch.com/investing/stock/vod
About John C. Malone
John C. Maloneis a billionaire American business executive, landowner and philanthropist. Malone is now chairman of Liberty Media, Liberty Global, and Liberty Interactive. He was interim CEO of Liberty Media, and was succeeded by former OracleCFO Greg Maffei.
About Liberty Global
Liberty Global plc is an international telecommunications and television company. Liberty was created in 2005 by the merger of the international arm of Liberty Media and UGC (UnitedGlobalCom). The company is one of the largest broadbandinternet service providers outside of the United States.Liberty Global is the world’s largest international cable company since 2013, with operations in 14 countries, and 35,000 employees. Its cable services pass 47 million homes, with 24.5 million customers or 48.3 million RGUs which includes video, internet, and voice subscribers. Liberty Global has headquarters in London and has offices in Amsterdam and in Douglas County, Colorado.Liberty Global stock market evolution: http://www.marketwatch.com/investing/stock/lbtya