In a briefly worded statement Vodafone announced that the talks that began in June between Vodafone Group Plc and Liberty Global Plc have ended.
Vodafone and Liberty Global – stronger together?
The merger would have created a 100 billion giant in the European market, although it might have faced some tricky discussions with regulators in territories such as the Netherland, Ireland and the UK where there is overlap between the businesses. In Ireland for example UPC is a Liberty Global owned VMO (Virtual Mobile Operator) using the Three network and Liberty Global are also the owner of the largest cable provider in the country. Vodafone has a significant presence in the mobile space and a smaller fibre network presence there.
There was huge synergy between the two companies and while it seems that neither company was large enough to buy the other there were other options tabled during the talks, all of which never quite became successful. The statement indicated the exchange of selected assets, indicating a merger but the companies appear as though they couldn’t reach an agreement on what constituted the right deal.
The question is, where will these companies turn next. Will Liberty Global turn their eyes on Colt Telecom, further strengthening their hand in European Telecoms. The problem is that there are fewer telecom’s companies around now since the likely acquisitions of O2 and EE in the UK and other mergers across Europe.
Similarly Vodafone will need to develop a growth strategy soon that will appease the shareholders as competition, especially from the BT/EE combination could see a threat to their stranglehold on the corporate market in the UK especially.
Conclusion
It will be interesting to see how the share prices fair through the day as the investors consider this latest announcement. While it may come as no surprise to some of them given the signs over the last few months that talks were not going well there is likely to movement for both companies.
