AT&T looks to buy Vodafone in huge global telecommunications merger

US telecommunications giant AT&T is reportedly examining the possibility of a takeover of Vodafone, with the deal set to send shockwaves through the global telecommunications and smart device industries.

According to Bloomberg, the combined entity would have a market capitalisation of over $US250 billion along with more than 500 million subscribers worldwide.

Vodafone currently owns and operates networks in over 30 countries and has partner networks in over 40 additional countries.

Across Europe, that includes majority-owned carriers in the UK, Albania, Czech Republic, Greece, Hungary, Ireland, Italy, Malta, the Netherlands, Northern Cyprus, Portugal, Romania, Spain and Turkey.

Outside Europe, Vodafone is the majority owner of carriers in the Democratic Republic of Congo, Ghana, Mozambique, Tanzania, Egypt, Lesotho, Qatar, South Africa and India.

AT&T is reportedly interested in purchasing the British carrier’s European assets, while selling subsidiaries in emerging markets to America Movil, China Mobile or Orange.

Any takeover deal would have implications in the Australian telecommunications market, with Vodafone’s troubled Australian subsidiary owned by a joint venture with Hon Kong based telecommunications giant Hutchinson Whampoa.

It would also have big implications in New Zealand, where Vodafone’s wholly-owned subsidiary purchased Telstra’s New Zealand-based cable TV and internet division, known as Telstra Clear, for $NZ840 million last year.

It is unclear what would happen to the company’s Australian and New Zealand assets if a takeover were to go ahead.

In early September, SmartCompany reported Vodafone was set to sell its 45% stake in US carrier Verizon Wireless to joint venture partner Verizon for $US130 billion.

That deal is set to be the third largest corporate deal in history, trailing only Vodafone’s $US203 billion takeover of Germany’s Mannesmann in 1999 and AOL’s $US181 billion acquisition of Time Warner in 2000.

Vodafone has promised to return 71% of the proceeds from any Verizon Wireless sale, worth $US84 billion, to shareholders, while leaving the telco giant billions for potential mergers and acquisitions, as well as improvements to its mobile phone networks around the world.

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