According to the Financial Times, Vodafone is close to a deal with which the provider takes over the German branch of Liberty Global, Unitymedia. In addition, various East European cable networks would be part of the acquisition. The parties have not confirmed the message.
The transfer transaction may involve around 16.5 billion dollars, or 13.5 billion euros. This makes it the largest European telecom merger of the past five years. The takeover would be similar to merger between Vodafone and Ziggo in the Netherlands, which was completed in early 2017. Although it can also be a complete acquisition and not a joint-venture like in the Netherlands
Deutsche Telekom and for example the Spanish Telefónic are not happy with the possible takeover. Markus Haas, the CEO of Telefónica in Germany, says the acquisition will generate a monopoly in the field of content distribution over cable and will lead to a duopoly on fixed networks in Germany. He wants the possible takeover to be properly investigated by the regulators.
In this context it may be important which supervisor may ultimately pass judgment on the takeover. The German federal competition watchdog has in the past more often blocked acquisitions in the cable sector. But if Liberty Globals cable networks of Hungary, the Czech Republic and Romania are actually part of the acquisition plans, then the combined turnover of the companies to be acquired will be higher and the European Commission will come into play. That could increase the chances of green light, partly because the merger in the Netherlands could also continue.
If the takeover actually takes off, it seems to be in contradiction with previous statements by Liberty Global’s CEO, Mike Frisian. In November 2016, he indicated that the merger between Ziggo and Vodafone was a one-time deal that did not receive a repeat with subsidiaries of Liberty Global in other countries.