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Another major change may be imminent in the UK telecommunications market.
Spain’s Telefónica and media group Liberty Global are considering a merger of their British activities, as reported by the Bloomberg news agency on Friday, citing people familiar with the matter. If an agreement is reached, this could be announced next week.
However, a final decision has yet to be made. Negotiations could also fail or be delayed. A spokesperson for the Spanish group, which plans to release its first-quarter figures on May 7, had no comment on the information, Bloomberg said. Liberty Global could not be reached for comment. Telefónica Germany, the German subsidiary of the heavily indebted Spanish group, would not be affected by the possible transaction.
The merger could involve the highly indebted Spanish group UK mobile communications business (O2 UK) and Liberty Global. Virgin The media offering telephone, television and internet services in the UK will be merged. With brands like Tesco Mobile and Giffgaff with 34 million customers, O2 is the UK’s largest mobile operator. Virgin Media recently had 5.3 million customers.
Since O2 UK is the larger of the two companies, Telefónica is said to receive a compensation payment for this according to a “FT” report. The New Street Research analyst, who specializes in telecommunications and technology, believes that the combination of the two companies will reduce combined costs by £ 5 billion. O2 UK could be valued at the equivalent of more than £ 12 billion or around € 14 billion
The transaction could become the largest in the UK telecommunications industry since 2015, when the former monopoly BT acquired EE for around £ 12.5 billion. EE had previously had Deutsche Telekom and the French group Orange. Since then Deutsche Telekom has held around twelve percent of BT’s shares.
Even if it’s speculation, a possible transaction in the stock market has been welcomed after Liberty Global’s New York stock rose 15 percent after Bloomberg’s announcement hit the market. And Telefónica shares traded in the United States in the form of so-called depository receipts (ADRs) also rose significantly on Friday night.
Experts have long anticipated a new push from the Spanish to find a solution for the British mobile communications business. In 2015, Telefónica had found a buyer with Chinese mobile operator Hutchison, which is already represented in Britain, but the deal, which was worth around € 13 billion, was not closed due to a veto by the European competition authority. .
“We were very concerned that consumers would have had fewer options and would have had to pay more to find a suitable cell phone package,” said Margrethe Vestager, the current EU Competition Commissioner. Innovations and expansion of network infrastructure in the UK would also have been hampered.
Since the transaction that is now spreading between Telefónica and Liberty Global would not be a merger of two mobile phone companies, at least no provider would disappear. In addition to O2 UK, BT, the division of Hutichson Tres, Vodafone is still active.
/ nas / zb
LONDON (dpa-AFX)
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