Bloomberg: AT&T Exploring Vodafone Take-over Next Year

(RTTNews) - Telecom giant AT&T Inc. (T) is working on a potential takeover of UK-based Vodafone Group Plc (VOD, VOD.L) next year, Bloomberg reported, quoting people familiar with the situation. The two companies have not entered formal discussions.

AT&T is said to be looking into which all assets of Vodafone it should retain after the deal, and who could be interested in buying what it divests.

Mobile broadband adoption in Europe has lagged behind the U.S. and keeping this in focus, AT&T is said to be formulating a strategy for Vodafone's operations in Europe.

A merger is expected to create the world's largest telecommunications operator by sales. The combination could have market capitalization of over $250 billion and large-scale operations globally with over 500 million wireless subscribers worldwide.

The company could also be in a position to challenge Google Inc. (GOOG) and Apple Inc. (AAPL) when negotiating handset subsidies and taking out of new technologies such as mobile advertising.

In September, the British telecom giant agreed to sell its 45 percent stake in Verizon Wireless, its joint venture with U.S. telecommunications giant Verizon Communications, Inc. (VZ) in a $130 billion cash and stock deal.

Any deal with AT&T would have to wait for the completion of the transaction with Verizon, the report added today.

Vodafone last month completed the voluntary public takeover offer for Kabel Deutschland Holding AG, after the EU earlier approved the 7.7 billion euros acquisition.

T settled down by 0.2 percent on Thursday while VOD.L closed at 224.50 pence.