NEW YORK (The Deal) -- U.K. cellphone heavyweight Vodafone Group (VOD) on Friday said it was in talks about swapping unnamed assets with international cable provider Liberty Global (LBTYA) and denied reports that a union of the two companies was a possibility.
"There is no certainty that any transaction will be agreed, nor is there certainty with respect to which assets will ultimately be involved," the company said.
The announcement is the first admission of long-suspected talks between Englewood, Colo.-based Liberty and Newbury, England-based Vodafone, and follows a Bloomberg report on Thursday that the two were working on either a merger or an asset swap. The talks were reportedly initiated by Vodafone CEO Vittorio Colao, who wanted to buy Liberty, but regulatory concerns, as well as the future roles of Colao and Liberty chairman John Malone, became sticking points.
Malone, the Colorado cable magnate, said in May that Vodafone and Liberty would make an excellent fit in Europe, but both companies had been silent on any talks until Friday's announcement.
The confession disappointed Vodafone investors who had been hoping for an acquisition, and the shares dipped 1.8%, or 4.35 pence, lower to 243.75 pence ($3.73). Vodafone has a market cap of £66.2 billion ($100 billion), while Liberty is worth $46.2 billion.
Vodafone and Liberty are talking about exchanging Liberty's expansive European assets for Vodafone's Middle East and African businesses, according to Bloomberg. If true, that would signal a significant strategy change at Liberty, which is focused on Europe with a handful of South American activities.