NEW YORK ( TheStreet) -- If billionaire media mogul John Malone does decide to merge his sprawling international cable-TV company Liberty Global (LBTYA) with the U.K.-based wireless carrier Vodafone (VOD) , it's more than likely the deal would be structured as an all-stock transaction to avoid most taxes, said corporate tax consultant Robert Willens.
Malone, as famous for shaping cable-TV in the U.S. and the world as for his aversion to paying taxes, is said to be considering overtures from Vodafone to combine the two companies, according to a report from Bloomberg News. Vodafone, which operates mobile-telephone service throughout Europe, Asia and parts of South America, is under pressure to acquire fixed-line assets to offset rival BT's (BT) efforts to acquire a wireless provider in the United Kingdom.
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Vodafone covets Liberty Global's extensive broadband network as more media companies offer news and entertainment offerings online that historically have been available only through cable or satellite-TV. Malone, who is also chairman of Liberty Global as well as Liberty Media (LMCA) and Liberty Interactive (QVCA) , has long made acquisitions based in part on whether he could avoid paying taxes.
"If he were to do a deal, it would have to be structured as a tax-free reorganization," said Willens, who worked at Lehman Brothers for 20 years prior to the firm's dissolution in 2008. "That would mean Vodafone would pay in stock, exchanging their shares for Liberty shares in a tax-free merger transaction."