Telefonica in talks to merge O2 with Virgin Media – source

FILE PHOTO: A general view shows the Telefonica headquarters in Madrid, Spain, June 12, 2018. REUTERS/Juan Medina

MADRID/LONDON (Reuters) – Spain’s Telefonica SA (TEF.MC) is in talks with billionaire John Malone’s Liberty Global Plc (LBTYA.O) to explore a merger of its British mobile operator O2 with cable network company Virgin Media, a source familiar with the matter said.

Telefonica has been weighing options for the business since 2016 when a previous deal to combine O2 with Three UK, controlled by CK Hutchison Holdings (0001.HK), was blocked by European antitrust regulators amid concerns that reducing the number of mobile operators in Britain would harm consumers, banking sources said.

Telefonica declined to comment and Liberty was not immediately available to comment.

Liberty Global, which has controlled Virgin Media since 2013, sold its cable networks in Germany and central Europe to Vodafone in a $22 billion deal which was finalised last year.

Virgin Media had 6 million cable customers and 3.3 million mobile customers as of the end of 2019.

Bloomberg was first to report about the ongoing talks between Telefonica and Liberty Global.

Reporting by Belen Carreno in Madrid and Pamela Barbaglia in London; additional reporting by Bhargav Acharya and Nathan Allen; Editing by Shinjini Ganguli and Jane Merriman

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