Vodafone may buy cable giant Liberty Global in mega telecoms merger

29 Nov 2014

Vodafone is mulling over the opportunity to acquire cable player Liberty Global, which owns Virgin Media and UPC, in a massive takeover that will result in a global telecoms juggernaut worth over US$130bn.

It is a time of seismic shifts in the telecoms world as operators on a global level are seeking to marry up all their infrastructure to create a single network capable of quad play services – phone, internet, mobile and TV – whatever the location.

BT is seeking to return to the mobile world after making the strategic blunder of selling O2 to Telefónica in 2005 for stg£18bn, and is now in talks with Telefónica about buying O2 back.

It is also talking to France Telecom and Deutsche Telekom about buying Everything Everywhere, such is its conviction it needs to return to mobile.

War games

Vodafone is understood to have sought advisors to consider a response to this new BT strategy that will place it on higher ground to face any onslaught in a telecoms world where quad play will be the only game worth playing.

The acquisition of John Malone’s Liberty Global, which owns Virgin Media in the UK and UPC in Ireland, is one of several options that Vodafone is considering.

Vodafone is already in a commanding position in the UK where, having bought Cable & Wireless in 2012 for stg£1.04bn, has the largest fibre footprint as well as trans-global fibre networks.

Acquiring Liberty Global would give Vodafone access to fibre networks that connect directly to homes in Europe, America and Australia. Nasdaq-listed Liberty Global reported annual revenues last year of US$17.3bn and employs 35,000 people worldwide.

News of the potential acquisition yesterday sent shares in Liberty Global rocketing 10pc in New York.

Strategy image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years