Vodafone may be having troubles with India’s tax authorities, but it isn’t deterring the British telecom giant, to go on with what could be, the largest ever acquisition in the telecommunications industry.
Vodafone is planning to acquire Liberty Global, one of the largest cable-operating companies in Europe. This acquisition, if it happens, will snowball Vodafone to become the largest telecommunications entity on the planet, worth $130 Billion. Vodafone is currently number 2.
As per Reuters, the company is currently analyzing the financial and regulatory hurdles as well as investor support for a share based transaction. After the reports came out, the shares of Liberty Global jumped up to 7.4 percent in New York Stock Exchange while the shares of Vodafone raised up by 2.9 percent in London.
Though there are no formal negotiations with Liberty Global yet and there is no guarantee that the deal will be closed as valuation and regulatory remains the key issues, the major concern of the company is apparently the debt level and the reaction of the investors to the deal.
Vodafone and Liberty have been competing to acquire European telecom assets. The company also said in March that it plans to offer mobile-phone service to customers in Europe through wholesale agreements.
Liberty Global has a market capitalization of $39.4 billion and $41.1 billion in total debt after a series of European acquisitions. Vodafone has a market value of about 62 billion pounds ($97 billion). It has been adding cable assets across Europe as the telecommunications market moves toward bundled packages with the combination of TV, phone and broadband services.