Vodafone Expects Green Signal From EU On Liberty Global Deal

Commenting on the European Commission’s probe into the $21.8 billion (£17.13 billion) Liberty Global deal, Vodafone Group Plc (NASDAQ:VOD) recently said that it expects EU antitrust regulators to approve its purchase of some Liberty Global plc (NASDAQ:LBTYA) assets in Germany and eastern Europe by mid-2019. The news was reported by Reuters.

The Commission opened a full-scale enquiry into the deal as EU antitrust regulators think that it may reduce competition in Germany and the Czech Republic, offering monopolistic advantage to the merged firm.

The deal would probably reduce competition in Germany in the retail fixed telecom markets and TV markets, limit investments in next-generation networks, while giving the combined entity more power as a TV broadcaster. The Commission further said that some competitors might be shut out of the Czech Republic market, where Vodafone offers primarily mobile telephony services and Liberty Global offers fixed services.

The transaction between Vodafone and Liberty Global would enable the former to compete more effectively with Deutsche Telekom (DE:DTEGn) AG (OTC:DTEGY) in the German rival’s home market. It would also expand Vodafone’s reach in broadband, cable and mobile services elsewhere in Europe, leveraging Liberty Global’s assets in the Czech Republic, Hungary and Romania.

However, the EU competition enforcer mentioned that it saw no issues in Romania and Hungary. It will decide whether or not to clear the transaction by May 2, 2019, though the deadline can be extended if Vodafone offers concessions. The company believes that the deal is on track for a green signal.

Shares of Vodafone have lost 9.7% compared with a decline of 3.9% for the industry in the past three months.



Vodafone currently has a Zacks Rank #4 (Sell). A better-ranked stock in the industry is KT Corp. (NYSE:KT) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

KT has a long-term earnings growth expectation of 10.5%.

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