Vodafone in talks to buy Kabel Deutschland in $9.3 bn deal

Vodafone Group, the world's second largest mobile phone company, today confirmed media reports that it is in takeover talks with Germany's biggest cable operator Kabel Deutschland Holding AG (KD).

Media had this week speculated that the London-based mobile-phone company is in talks to buy KD in a €7 billion ($9.3 billion) deal in order to strengthen its triple-play offering of TV, mobile and broadband.

"Vodafone Group Plc notes the recent speculation regarding a potential offer for Kabel Deutschland Holding AG and confirms that it has made a preliminary approach to KD regarding a possible offer for the company," Vodafone said in a statement.

"There is no certainty that any offer will ultimately be made nor as to the terms on which any such offer might be made," Vodafone added.

Shares of KD have risen 27 per cent after Vodafone's interest first surfaced four months ago.

Vodafone had in February had also said that it was in discussions with KD, but the talks failed after the German cable operator's CEO, Adrian von Hammerstein rejected Vodafone's informal offer as too low.

By seeking to acquire the biggest cable provider in Germany, with 8.5 million connected households, Vodafone would add fast fixed-line services to its mobile offerings and prevent the asset's purchase from John Malone's Liberty Global Inc, which had also evinced interest.

KD offers digital, high definition (HD) and analog TV, Pay TV and DVR offerings, Video on Demand, broadband and fixed-line phone services via cable as well as mobile services.

The publicly listed company operates cable networks in 13 German federal states and supplies its services to approximately 8.5 million households.

The company has approximately 3,500 employees, market capitalisation of €6.6 billion, and annual turnover of €1.7 billion.

Two of the telecom industry's biggest names are involved in the Vodafone- Kabel deal - Vittorio Colao, long-serving chief executive of Vodafone, and KD chairman Tony Ball, former boss of British pay-TV giant BSkyB.

Vodafone emerged as a market leader in mobile in Germany following its huge, £112 billion merger with Mannessmann in 2000, a deal that turned out to be hugely over-inflated.

According to industry experts consumers were increasingly looking to a single company providers for phone, broadband, mobile and TV known as ''triple play'' or ''quad play.''

They say triple-play operators were increasingly taking share in mobile, whereas mobile operators including Vodafone had failed to win significant share in the triple-play segment.

They say Vodafone could expect ''significant synergies'' if it bought Kabel Deutschland.