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  • Tariq Ashraf
  • Quelques bons mots, un peu d'humour (Anglais), beaucoup de Business (Une deuxième religion), des TMT... somme toute, le regard d'un simple Citoyen (Au sens de la Grèce antique) sur notre société.

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7 juin 2015 7 07 /06 /juin /2015 17:05

I have been analysing the very-high broadband market since 2010... and back then it was quite clear that telecoms and cable operators M&A was bound to happen.

 

Yet as a telecoms executive told me, some people talk about cable mergers/buyouts, and some do move forward.

Well, Vodafone did move forward with the Kabel Deutschland buyout in Germany, and the Ono one in Spain.

Lately, one could hear rumours regarding a merger between Vodafone and Liberty Global, and Vodafone did issue a statement about ongoing talks with Liberty regarding assets swap across Europe.

 

In my humble opinion, Vodafone had to issue such a statement, because of UK stock market regulations, as Mr Malone almost "revealed" the talks in order to put pressure on Vodafone via talking directly to Vodafone's shareholders.

 

Vodafone is "minimizing" the extent of the ongoing talks yet not closing the door on a merger, as an asset swap does not make sense for either party:

 

• Vodafone does need cable assets in order to provide fixed VHBB, Quad play offerings in order not to be squeezed out in European markets where it is providing only mobile offering, provide TV content (One has to bear in mind that cable-operators primary business is deploying cable and negotiating TV content rights in order to bundle them for end clients), and last but not least cable networks could also provide much needed VHBB backhaul for 4G radio access networks.

 

• Liberty does not need mobile "assets", as the cable company could issue MVNO RFP's (And already did so), even an European-wide one, which could provide a mobile footprint while incurring a lower cost than for other players due to their bargaining power (The Belgian MNO Base buyout made sense as the asset was dirt cheap)

 

A full merger does make sense for both parties, as Mr Malone would be a major shareholder in the enlarged group while receiving some cash, and bet on achieving synergies in order to further value its shares, Vodafone would transition from a European mobile powerhouse to a fixed-mobile one.


Mr Malone talking about a potential deal and market divestitures looks like just a bargaining play as it all goes down to valuation, and the cash to share mix ratio…

 

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