Deutsche Telekom Is Said Near Deal for Liberty Global Austria

(Bloomberg) -- Deutsche Telekom AG is in advanced talks to acquire Liberty Global Plc’s Austrian business for roughly $2 billion, according to people familiar with the matter.

An agreement could be announced in the coming days, said the people, who asked not to be identified as the talks are private. A deal would give the former phone monopoly a fixed footprint in a key market where its business is limited to wireless, while helping pave the way for cable billionaire John Malone’s European media company to pursue a potential tie-up with Vodafone Group Plc, the people said.

The transaction could fail to materialize, the people said. There is also a risk regulators could raise competition concerns, one of the people said.

Deutsche Telekom has focused on transactions that allow it to offer both mobile and landline services, including an agreement last year to purchase Vodafone’s fixed assets in the Netherlands -- a deal that helped facilitate Vodafone’s Dutch joint venture with Liberty Global. Vodafone and Liberty have for years discussed a potential merger or asset swap, options that have been hampered by concerns over valuation and efficiencies.

Representatives for Deutsche Telekom and Liberty Global declined to comment. The Financial Times reported on the discussions earlier on Thursday.

Shares of Liberty Global rose 4.3 percent to $34.12 at the close in New York. Deutsche Telekom closed 0.3 percent higher at 15.05 euros earlier in Frankfurt.

Austria isn’t a priority for London-based Liberty, whose Virgin Media business in the U.K. is responsible for the largest share of revenue. The unit known as UPC Austria, the biggest cable operator in the country with 654,000 customers, provides video, broadband and internet services. Austria contributed about 2 percent of Liberty Global’s revenue in 2016, according to data compiled by Bloomberg.

Speculation about a broader deal between Liberty Global and Vodafone has been helped by public comments from executives and Malone himself. Vodafone Chairman Gerard Kleisterlee in July said the company was open to partnering further with Liberty Global, following the Dutch joint venture, but said there would have to be a “huge change” in how they value each other’s assets for that to happen.

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