Vodafone Group Plc (ADR) (NASDAQ:VOD) is reportedly in early talks with Altice about the purchase of Portuguese cable business Cabovisao.
The French telecom group Altice must sell the Portuguese cable business under the conditions set under the purchase of Portugal Telecom from Brazil’s Oi. The €7.4 billion acquisition by Altice is conditional on its sale of Oni and Cabovisao.
According to sources, several other parties are also interested in acquiring the companies. The sale process is expected to last through the summer and is currently in beginning a stage.
The European Commission had been concerned that the merger of Altice and Portugal Telecom would have been anti-competitive. Therefore, the merged entity has to sell off some of its assets to maintain competition.
According to sources, Vodafone Group Plc (ADR) (NASDAQ:VOD) is mainly interested in acquiring Cabovisao. Cabovisao provides fixed internet access, pay television, and fixed telephony services for consumers.
Vodafone has expressed its desire to add fixed line services to increase its mobile business, and the purchase of Cabovisao is seen by analysts as an important move to step up its already significant Portuguese fixed line operations. Vodafone has made similar purchases boost its mobile operations in Spain, Germany, and UK.
Nos, the Portuguese telecom company, might be interested in acquiring the Altice businesses. However, the company may face regulatory problems due to having a significant share in the market already.
According to Analysts, at Espirito Santo, Altice might try to sell its businesses to Vodafone. The purchase, according to the bank, will increase Vodafone’s share in fibre/cable market to 16% from the current 10%. Vodafone will also cover 2 million households if the deal goes through.
Cobavisao’s in 2014 had revenue of €100 million and pre-tax earnings of €40 million. The acquisition of Cobavisao by Vodafone will allow the British group to not be aggressive in pricing to increase its share of the market.
