LONDON - The British wireless giant Vodafone said on Wednesday that it had approached the German cable operator Kabel Deutschland over a potential takeover that could be more than $10 billion.
An acquisition would allow Vodafone, which also owns 45 percent of Verizon Wireless, to expand its current cell phone operations in the fast-expanding cable and television market in Germany, as well as offset increasing competition from cable providers that are looking to increase their own cell phone services.
“Kabel Deutschland does not just represent an opportunity for Vodafone to extract synergies but also to better defend its core business,†telecommunicationss analysts at Espirito Santo in London told investors in a research note on Wednesday.
Kabel Deutschland is Germany’s largest cable operator with around 8.5 million customers across the European country. The company’s current market capitalization is 7.1 billion euros, or $9.4 billion, and its shares rose 8.3 percent in morning trading in Frankfurt on Wednesday. Vodafone’s stock price fell 4.5 percent in morning trading in London.
The potential deal would be Vodafone’s largest acquisition since it bought a controlling stake in Hutchison Essar of India for $11 billion in 2007.
The British company did not provide guidance on the pricing of a potential deal, and said it may still not put forward an official offer. Kabel Deutschland also confirmed that it had received a preliminary approach from Vodafone.
Representatives for Vodafone and Kabel Deutschland declined to comment further.
The move for the German cable operator is the latest in a number of acquisitions in Europe’s telecommunications and cable, as rivals like John C. Malone’s Liberty Global and the Mexican billionaire Carlos Slim jockey to buy assets.
Vodafone also has come under increasing scrutiny as speculation persists hat its partner in the United States, Verizon, may buy out Vodafone’s minority stake in their cell phone joint venture, Verizon Wireless, for more than $100 billion.
By taking control over Kabel Deutschland, analysts said that the British telecoms company could increasing compete with local rivals by adding cable services to existing cell phone and fixed-line offerings in Germany.
Last month, Vodafone, which has more than 30 million customers in Germany, signed an agreement with its German competitor Deutsche Telekom to gain access to its local fixed-line network to offer Vodafone’s customers high-speed broadband.
