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Vodafone Mulls $8 Billion Bid for German Cable Operator

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Vodafone is reportedly mulling a USD8 billion bid to buy the German cable TV operator, Kabel Deutschland as the company seeks to bolster its landline operations following last years deal to buy Cable & Wireless Worldwide.

The proposal is reported by Germany's Manager Magazin to have come from the head of Vodafone's German division in a submission to the Group headoffice.

Citing unnamed sources, the report said that no decision has been taken by Vodafone at the moment, although Vodafone's CEO Vittorio Colao is said to be in favour. However, Vodafone has looked at a bid for Kabel Deutschland several times in the past without taking action.

Any bid by the company would almost certainly have to be a friendly takeover, as the country still retains a wariness to hostile bids, and remembers how Vodafone launched the huge hostile bid for Mannesmann in 2000.

As part of that acquisition, Vodafone ended up with a landline operations - the former Arcor - which was rebranded as Vodafone in 2009, and could be folded into the cable operator if a bid is made.

Vodafone would also gain from economies in backhaul of its mobile traffic, which is becoming an increasingly demanding service due to increased mobile broadband traffic requiring connectivity to web servers.

Kabel Deutschland was founded in January 1999 by Deutsche Telekom, after it was ordered to spin off its entire cable TV business as required by regulatory terms.

On the web: Manager Magazin

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Tags: kabel deutschland  vodafone  Germany