Vodafone Confirms Talks With Liberty Global on Netherlands Assets

  • Joint venture would incorporate companies' Dutch operations
  • Discussions don't extend beyond the creation of Dutch JV

Vodafone Group Plc is in talks with Liberty Global Plc over the creation of a joint venture in the Netherlands that would incorporate both companies’ local businesses.

The discussions don’t extend beyond the Netherlands, Vodafone said in a statement Tuesday in response to a Bloomberg News report that the companies had resumed talks on partnerships. There is no certainty that a deal will be agreed, the Newbury, England-based phone company said.

Vodafone shares dropped 1 percent to 223.10 pence at 2:10 p.m. in London, after earlier rising as much as 3.4 percent. Shares of Royal KPN NV, the biggest telephone operator in the Netherlands, fell as much as 3.4 percent.

A spokesman for Liberty Global declined to comment.

Vodafone and Liberty Global resumed talks this year about possible asset swaps in Europe after scrapping deliberations involving some of their biggest markets last year, people with knowledge of the matter said.

The Netherlands, where Vodafone operates a mobile business and Liberty owns cable TV assets, will be a focus of the talks, one of the people said. Liberty is interested in expanding in the country and may make an offer for Deutsche Telekom AG’s local mobile unit if the negotiations with Vodafone don’t lead to an agreement, the person said.

Previous Talks

Previous talks between Vodafone and Liberty ended in September after the companies couldn’t agree on the value of U.K. and German operations, two of the largest markets for both, a person familiar with the matter said at the time. Cable TV billionaire John Malone, Liberty’s chairman, has said that while the companies’ assets would fit well together in Europe, philosophical differences on dividends and expansion will make a combination difficult.

Liberty Global and Vodafone together have more than $80 billion in annual revenue and about $115 billion in combined market capitalization.

An asset swap or other collaboration could give Vodafone an opportunity to gain pay-TV and broadband businesses as it seeks to reduce its reliance on a wireless business that has suffered from a fierce price war in Europe. For Liberty Global, a deal with Vodafone would deepen a shift in strategy at a media company that until recently has shied away from owning wireless networks.

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