Vodafone’s (LON:VOD) proposed acquisition of Liberty Global’s assets in Germany and Eastern Europe is likely to face a full EU antitrust investigation, Reuters has reported. The news comes after a business group representing German broadband providers recently called on EU regulators to block the deal.
Vodafone’s share price has been little changed in London this morning, having inched 0.33 percent higher to 169.50p as of 08:47 GMT. The stock is underperforming the broader market rally which has seen the benchmark FTSE 100 index gain 2.30 percent to 7,140.98 points so far this morning. The blue-chip telco’s shares have lost just under a quarter of their value over the past year, as compared with about a 2.3-percent drop in the Footsie.
EU probe prospects
A person with knowledge of the matter told Reuters that Vodafone’s $21.8-billion proposed deal with Liberty Global is likely to face a full EU antitrust investigation. The newswire explained that the opening of an in-depth investigation would in practical terms mean the European Commission’s rejection of a request by the German cartel authority to take over the case. The Commission may see the deal in a broader EU-wide perspective, which could benefit Vodafone.
Reuters noted that the Commission, which is scheduled to wrap up its preliminary review by December 11, and the FTSE 100 group had both declined to comment, while Liberty Global had said that it was “in constructive discussions with the European Commission and are confident of a positive outcome in due course”.
Analysts on telco
Last week, Berenberg Bank and BNP Paribas which rate Vodafone as a ‘buy,’ set price targets on the shares of 243p and 176p, respectively. According to MarketBeat, the FTSE 100 telecoms group currently has a consensus ‘buy’ rating and an average price target of 215.30p.