Vodafone said it was in talks with John Malone’s Liberty Global about buying some of the cable company’s assets in the continental European countries where they both operate, chief among them being Germany.
It said it was not in discussion with Liberty Global regarding a merger of the two firms.
“Vodafone confirms that it is in early stage discussions with Liberty Global regarding the potential acquisition of certain overlapping continental European assets owned by Liberty Global,” the company said.
The Financial Times earlier said the two were in talks about swapping assets in Europe.
Shares in Vodafone closed up 2.4 percent at 219.5 pence a share. Liberty Global rose to more than two-years highs in new York and was up 2.9 percent at $38.28 in afternoon trading.
Liberty Global noted Vodafone’s statement and had no further comment, a spokesman said.
The world’s second biggest mobile operator and the cable company discussed swapping assets in 2015, but they could not reach agreement on values.
The two, however, did agree the following year to form a joint venture in the Netherlands, VodafoneZiggo, bringing together mobile, broadband and TV services in a package designed to compete more effectively with former state monopoly KPN.
Analysts have said that a more wide-ranging tie-up between the two would be the logical next step for both companies.
Vodafone Chief Executive Vittorio Colao has spoken favorably about doing further deals with Liberty, saying in November 2016 that the two could be a counter force to Deutsche Telekom.
Malone, whose Liberty Global is largely funded by debt, said last year that Liberty and Vodafone could not agree on values in the previous talks, but “the door was always open” to the British company.
Vodafone and Liberty also have overlapping operations in Czech Republic, Hungary and Romania in continental Europe, as well as in two countries excluded from the talks, namely Britain and Ireland.
But Germany is by far the biggest continental market where Liberty’s assets would help Vodafone to take on the former incumbent, Deutsche Telekom, with bigger packages of converged services.
Vodafone has a mobile market share of 26.1 percent by revenue in Germany, putting it second behind Deutsche Telekom with 30.3 percent, according to the Federal Network Regulator’s latest annual report.
Deutsche Telekom leads the broadband market, with 13 million customers in Germany and a 40.1 percent market share. Vodafone is second on 19.7 percent, and Liberty’s Unitymedia fourth at 10.5 percent, according to the VATM industry lobby.
A combination in Germany also stacks up geographically. Unitymedia is in the western German states of North Rhine-Westphalia, Hesse and Baden-Wuerttemberg, while Vodafone broadband is available in Germany’s other 13 federal states, meaning there is no overlap between the two.
Unity media reported revenue of $703.1 million in the quarter to end-September 2017, 18 percent of Liberty’s European revenue, and operating cash flow of $444.6 million, 24 percent of the group total.