Vodafone Group is considering a move to combine its business with international cable company Liberty Global, according to a Bloomberg report.

Vodafone is believed to be analysing the financial and regulatory issues that may need to be overcome, as well as potential shareholder support for such a deal. It is said to be concerned about the debt levels of the combined company.

According to Bloomberg, Liberty has a market capitalisation of $39.4 billion, with $41.1 billion in debt, which has been racked up through a series of acquisitions. It has 27 million customers in 14 countries.

There aren’t believed to be any formal negotiations taking place with Liberty and there is no guarantee of an agreement being reached.

The case for Vodafone to look at Liberty Global has been strengthened by the fact that BT is in talks to buy either Telefonica’s O2 or EE in the UK.

If one of the mooted BT deals is completed, Vodafone would be keen to boost its fixed presence in the UK. Liberty Global owns Virgin Media, which offers fixed broadband and pay TV services, as well as fixed and mobile voice, in the UK.

Blinkbox deal
Related to this, The Telegraph reported today that Vodafone is in advanced discussions to acquire UK-based video streaming service Blinkbox, which is currently owned by Tesco.

Despite reporting a £18.5 million loss in its most recent annual accounts filing, Blinkbox would give Vodafone a foothold in content for its entry into the broadband and pay TV market.

In September, Vodafone Group CEO Vittorio Colao said the company would consider a “transformational” merger or acquisition in the future if the price was right. A possibility of a tie-up with Liberty Global was first mooted a year ago.

Vodafone has been expanding its fixed presence across Europe, including last year’s €7.7 billion acquisition of cable company Kabel Deutschland in Germany, for which it defeated a rival bid from Liberty.

It also acquired Spanish cable service provider Ono for €7.2 billion in March and reached a fibre-sharing agreement with rival Portugal Telecom in July. Most recently, it inked a deal to acquire a majority stake in Greek fixed and broadband player Hellas Online.