Vodafone and Liberty Global Deal Could Still Go Ahead.
Corporate mergers are, in reality, the sorts of things which never happen quickly. Companies may well spend years appraising each other’s position in the market, assets, potential and value before engaging in talks to take over one another. Once those discussions are taking place, there’s no guarantee that they’ll even come to anything, and if they do, due diligence could put the kibosh on the whole thing before it gets anywhere. If that doesn’t get you, then competition and regulatory bodies might well do. Needless to say then, two huge companies coming together is a tricky business.
With all that being said though, it would appear that Vodafone and Liberty Global are back to the table, trying to make a go of it. Why does that sound familiar? Well, Vodafone executives were in talks with Liberty Global about a friendly merger back in June of 2015, saying that though the talks were going on “There is no certainty that any transaction will be agreed, nor is there certainty with respect to which assets will ultimately be involved.”
It’s exactly the kind of vague statements that executives involved in deals of this magnitude, but ultimately it failed to come to anything, with a statement in September 2015 issues saying that early stage discussions regarding an exchange of “selected assets” had been terminated. Coming in to 2016 then, it looked to all as if the deal was something of a nonstarter. Rather, it did seem that way, but if reports in This is Money are to believed, those talks are back on.
John Malone, chairman of the American listed media giant Liberty Global, has instigated new merger talks and the past couple of weeks have seen Vodafone and Liberty bosses meeting major investors to gauge their interest in a merger, effectively putting the wheels in motion for a gigantic takeover deal. Just how gigantic would the deal be? It might cost around £140 billion, a sum which makes BT’s purchase of EE look pale at just £12.5 billion.
But why would Vodafone want Liberty Global? Well, there are lots of reasons, but in the UK, there’s one pretty big one: Virgin Media. That’s right, the UK’s second biggest pay-tv operator is under the ownership of Liberty Global, and that would be a very tempting proposition for both companies. In the UK, Virgin Media offer TV, home phone, broadband and mobile. However, that mobile service is operated by Virgin Media, so any potential merger would mean that costs would be cut dramatically cut for Virgin, which would in turn mean better competition with Sky.
Customers on the 0844 800 3116 contact number for Vodafone don’t need to worry about the costs of their contracts jumping up though, because Vodafone are a surprisingly gigantic company. How gigantic is gigantic? Well, the Vodafone Group has around 450 million subscribers around the world, a place in over 65 countries and had an annual revenue of £42 billion.