Yahoo Finance Vodafone plots massive European expansion despite Indian woes
Vodafone is poised to launch a massive expansion in Europe despite uncertainty over the fate of its struggling Indian operation.
The telecoms giant is in advanced talks with Liberty Global, the owner of Virgin Media, about a takeover of cable networks in Germany, the Czech Republic, Hungary and Romania.
Discussions over a deal codenamed “Project Scorpio” that is estimated to be worth €21bn (£18.5bn) are in their final stages. Mike Fries, the chief executive of Colorado-based Liberty Global, flew into London last week.
It is understood that Vodafone plans to brush aside City concerns that its troubles in India could be an obstacle.
The operator is in the late stages of regulatory clearance for a merger of Vodafone India with rival Idea. The defensive deal was unveiled last year after Mukesh Ambani, India’s richest man, launched a price war.
The merger is due to remove Vodafone India and approximately €8bn of debt from the Vodafone balance sheet and is viewed by analysts as crucial to the financial flexibility required to complete the deal with Liberty Global.
However, Indian officialdom has not yet granted the final regulatory clearance in a complex and unpredictable process. Failure could crystallise heavy losses for Vodafone as Mr Ambani continues to apply heavy pressure.
Vodafone is due to argue a separate merger in India involving mobile masts offers necessary certainty to make its Europe move. It declined to comment.
