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20 February 2013
Vodafone has reportedly taken the next step in a potential €10 billion bid for Germany’s largest cable operator, Kabel Deutschland, by hiring Goldman Sachs as an advisor.
An acquisition of the cableco
would transform the German telecoms market, where Vodafone
already holds significant wireless market share but lags behind
Deutsche Telekom in the fixed broadband sector.
A person with direct knowledge of the matter told
Reuters that Goldman had been hired by the British
telecoms group, while a second person said Kabel Deutschland
had retained Morgan Stanley and advisory firm Perella Weingberg
to defend its interests should there be a Vodafone
Vodafone could save €300 million a year through less
reliance on Deutsche Telekom’s fixed lines into
homes and may also be able to offload mobile traffic onto the
Kabel Deutchland network, according to the newswire.
The acquisition would be the largest for Vodafone since its
entrance into India in 2007 and would mark a change in
strategy for the previously mobile-focussed group.
Market watchers have speculated that Vodafone would need to
make a foray into the fixed market in order to compete with the
increasing number of low cost operators and quad-play cable
companies entering the mobile space.
One potential hurdle to a deal would be European competition
regulators, who have blocked mergers of cable companies due to
concerns of price rises for consumers.