vodafone

Is AT&T Again trying To Buy Out European Giant Vodafone?

August 24, 2014 - Written By Wayne Peterkin

To say that AT&T is a massive company here in the US would be an understatement. In fact, they might just believe themselves to be too big for the U.S. market alone. It was only back in March that reports surfaced that AT&T was interested in diving into the European market by buying out the then struggling giant, Vodafone. Back in June, it seems that this buyout was heavily favored by Vodafone investors as their displeasure was plainly shown in stock shares which fell 7% the moment AT&T seemingly suddenly changed its mind by announcing to the U.K. that it was never interested in bidding on Vodafone.

AT&T started looking into buying out Vodafone ever since they were in the process of selling their 45% stake in Verizon back to Verizon Wireless for $130 billion back in January. This deal was so huge that according to reports, it was recorded as the third largest return of value to share holders in history. Most analysts knew that Vodafone would become a giant target right after this deal. They were dead on, AT&T started making hints at Vodafone even before the deal between Vodafone and Verizon was through. However, these plans were thwarted by Britain’s takeover panel when they asked AT&T to make their intentions clear. AT&T’s response to this was that it was never interested in bidding on Vodafone. They went even further by stating that their attention was focused on another competitor, Comcast, who was at the time ironing out a $45.2 billion dollar deal to purchase Time Warner Cable in order to create an even more powerful broadband provider that AT&T would have to contend with. It is also important to note that AT&T’s plan would have never come to fruition at the time anyway since Vodafone shareholders did not even approve the sale yet. Also, According to the rules of Britain’s takeover panel, AT&T would not have been able to make a formal bid for another six months.

Fast forward to the current time and Vodafone seems to finally be getting back on its feet. It seems that the $130 billion that they gained from Verizon has significantly helped them in achieving a more stable position, even though they are not completely out of trouble just yet. However, news of AT&T seeking to make a bid has once again surfaced and just like last time, has sent Vodafone’s share price up. Vodafone was never just sitting around waiting for AT&T to buy them out and have been hard at work. They have even bought some fixed broad brand providers such as the Greek provider Hellas Online for €72.7 million. This signifies that Vodafone has learned that being a cell phone provider alone would not be enough to sustain them and definitely intends to expand into providing fixed broadband as well. Vodafone is clearly committed to this new plan given their share in this Greek company which stands at 91.2 percent. Vodafone is also under contractual obligation to buy the rest of this company and plans to become “a leading integrated telecom operator in Greece with the number two market position by revenues in both fixed-line and mobile communications”.