AT&T is preparing the groundwork for a Vodafone Group takeover bid next year, according to a Bloomberg report.
There are as yet no formal talks between the two companies, says sources, but AT&T executives are apparently chewing over which Vodafone assets it would retain in a deal and who could buy others.
Randall Stephenson, AT&T’s boss, has made no secret of his desire for European expansion given the region’s greater scope for mobile broadband growth than in the US.
Another takeover candidate reportedly on AT&T’s radar is EE in the UK, a joint venture between Orange and Deutsche Telekom.
Analysts have already speculated that AT&T would be the front-runner buyer in any sale of Vodafone. Following the UK operator’s $130 billion exit from Verizon Wireless, any Vodafone deal becomes less complex (so fuelling the sale speculation).
If an AT&T/Vodafone merger were to go ahead, the new company, with 500 million mobile subscribers worldwide, would have much more purchasing heft with handset and equipment suppliers.
Any transaction, however, would have to wait until Vodafone’s sale of its Verizon Wireless stake, expected in early 2014. Bloomberg sources stress AT&T may ultimately decide not to go ahead with a bid.
One potential stumbling block, according to the report, is finding a home for Vodafone’s assets in Africa and India. AT&T is apparently much more interested in Europe’s developed markets and to exploit untapped 4G growth.
AT&T is believed to have examined spinning off most of Vodafone’s emerging-market assets into a new entity that could be acquired by a single buyer. Carlos Slim’s America Movil or China Mobile, said a source, could be potential buyers.
AT&T owns a 9 per cent stake in America Movil and has two seats on the board.