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Vodafone resumes talks with 'cable cowboy' John Malone's Liberty Global
Mobile company reveals it is in talks over a possible swap of assets in Holland, but that a full-blown merger would not be part of the deliberations
Vodafone has resumed talks with cable TV billionaire John Malone to discuss an asset swap with Liberty Global.
The discussions - which focus on the pair's respective businesses in Holland, where they operate TV, mobile, phone and broadband services - end speculation of a full-blown, £140bn merger, just months after previous asset swap deliberations had ended.
Vodafone and Liberty Global, which owns Virgin Media, had previously mooted a series of asset swaps or even an outright merger but those talks ended in September.
They scrapped deliberations over combining their mobile and cable networks in the British, German and other European markets when months of talks yielded little progress.
US-based Mr Malone, who is dubbed the "Cable Cowboy", previously said the firms hadn't found a "mutually successful" way to combine their networks, which could see Vodafone offer a combined broadband, mobile and television service in Europe. He previously suggested a deal in Britain would make sense. "We've looked at that from our side and there would be very substantial synergies if we could find a way to work together or combine the companies with respect to western Europe," he said.
"Is there a great fit in Germany? Absolutely. Is there a great fit in the UK? Absolutely."
The current talks, which began in January, are focusing on a joint venture in Holland to incorporate "both companies' local operating businesses".
Liberty Global owns Dutch cable firm Ziggo, which has 9m TV, broadband and fixed-line customers, while Vodafone Netherlands has 5m mobile customers.
Liberty Global, listed in New York, has a value of nearly £60bn including debt, while Vodafone is valued at around £85bn, including debt.
An asset swap would give Vodafone access to pay-TV and broadband businesses in Holland.
"The discussions are ongoing and do not extend beyond the creation of a joint venture in the Netherlands," Vodafone said, adding that there is "no certainty" an agreement will be reached.
Analysts at Moody's said: "A full acquisition of one company by the other was unlikely due to the lack of overlap for large portions of their operations, the complexity of the deal that affects many jurisdictions, and the high amount of debt relative to their ratings that the two companies already carry on their balance sheets."
The deliberations come as Vodafone Netherlands is seeking €115m (£87m) in damages from that country's biggest telecoms firm, KPN, accusing it of deliberately delaying the technology needed to launch a TV, phone and broadband bundle.
Vodafone, which relies on KPN's network to provide its fixed-line broadband and phone services, said KPN had delayed providing infrastructure over a three-year period. The former state monopoly denies the claims.