Vodafone Plans to Acquire German Cable Provider Kabel Deutschland

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By Jerin Mathew | February 14, 2013 7:35 PM EST

Vodafone plans to acquire Germany's largest cable provider. Photo: Vodafone

Telecom services provider Vodafone is planning to acquire Germany's cable provider Kabel Deutschland, as it looks to strengthen its position in Europe.

Vodafone's senior management has been planning a potential bid for the German group, but the company is yet to approach the cable operator's management, according to media reports.

With a market value of €6.2bn (£5.4bn, $8.3bn), Kabel is the largest cable provider in Germany with nearly 14 million subscriptions.

Vodafone's move comes after its CEO Vittorio Colao said last week that the company would target more acquisitions to boost growth, after recording a 2 percent decline in quarterly revenues.

The world's second-largest mobile operator after China Mobile, with operations spread across continents, has suffered from the long economic slowdown in Europe which is the most important market for the company in terms of revenue.

In 2012, the UK-based company acquired business-to-business telecommunications operator Cable & Wireless Worldwide (CWW) for £1.04bn, expanding its services and changing itself from a purely mobile services provider to an integrated mobile and fixed-line operator.

On the top of CWW acquisition, the new deal is expected to enable Vodafone to sell attractive combinations of mobile, fixed-line and TV services in Europe.

Globally, the telecom sector has recently seen a number of mega deals. Virgin Media was acquired by American firm Liberty Global for $23.3bn while Dell was taken private in a $24.4bn deal led by founder Michael Dell. American cable operator Comcast agreed to take the remaining stake it does not own in NBC Universal for $16.7bn.

On the back of such deals, Kabel Deutschland share price recently gained due to its possibility to become an acquisition target amid the ongoing consolidation in the sector.

With a bid for Kabel Deutschland, Vodafone intends to become more aggressive in pursuing acquisitions, after it became cash rich with dividends granted by US partner Verizon Wireless.

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