Vinjeru Mkandawire, M&A reporter at Mergermarket, highlights the key findings from its latest Global M&A trend report .

Valued at €185 billion, global telecommunications deals in 2013 were more than double the values of 2012 and eyes will be on the more fragmented European market as the latest frontier for growth this year.  
 
Following Verizon Communications’ purchase of a 45 percent stake in Verizon Wireless from Vodafone, lower European valuations are tipped to spur interest from US telecoms players, such as AT&T and America Movil, looking to gain a foothold in region. 
 
AT&T’s failed takeover of T-Mobile USA not only highlighted the lack of domestic growth options in North America, but also heralded renewed speculation of a takeover bid for Vodafone this year. 
 
Meanwhile, reports of AT&T’s interest in UK-based EE, which is jointly owned by Deutsche Telekom and Orange, also emerged last year. 
 
At the same time, European regulators’ calls for single market reforms could shake up the sector and drive much more European consolidation in 2014. 
 
The European cable industry, in particular, featured heavily on the 2013 M&A agenda; Vodafone’s takeover of 76.6 percent of Kabel Deutschland demonstrated that mobile operators are shopping for TV, cable and broadband assets. 
 
Larger strategic shopping for cable assets could include Liberty Global – which is said to be finalising the acquisition of Dutch cable operator Ziggo – and private equity group Altice SA, which recently increased its stake in French cable operator Numericable Group and has expressed interest in a string of cable buys including Brutele and VOO, the cable operations of Belgium-based Tecteo Group. 
 
Cable providers on the block include Germany’s Tele Columbus, which is reportedly in talks with a number of potential financial investors including CVC Capital Partners and Cinven Group, for a sale price valued at approximately €600 million. 
 
Liberty Global is a likely bidder, having acquired its competitors Unitymedia and KabelBW. Meanwhile, German rival Primacom is thought to have a sale price of up to €400 million.
 
Deutsche Telekom’s €546 million acquisition of GTS Central Europe highlighted the potential of Central and Eastern Europe. The region is likely to see heightened interest from investors as government stakes in Slovak Telekom, Telekom Slovenije, Telekom Srbija and Romtelecom are placed on the block. 
 
The Slovak Government is expected to announce details of its 49 percent stake sale in Slovak Telekom this month in a deal that could be worth up to €800 million. Czech financial groups KKCG and PPF are rumoured to be bidders. 
 
Among the list of telcos and private equity funds lining up for a stake worth roughly 75 percent in Telekom Slovenije – whose market cap stands at €803.5 million – are Deutsche Telekom and Telenor. 
 
Other CEE assets for sale include Telefonica Czech Republic and Polish telcos Orange Polska and Netia, with buyers tipped to include the likes of Telenor, TeliaSonera, Turk Telekom, Etisalat and America Movil. 
 
EmiTel, valued at approximately €723 million, could also change owners by the end of the year with T-Mobile Polska tipped to be a potential new owner.
 
Furthermore, emerging markets will continue to play a key role in consolidation for European telcos scouring growth opportunities unavailable in their region. 
 
Vodafone recently reported that its key areas for potential acquisitions would be in emerging markets such as Far East and Africa where Vodafone already owns 65 percent of South African cellular communications company Vodacom, which has reportedly attracted interest for some of its operations by Orange. 
 
Meanwhile, European telecom companies increasingly looking to narrow their portfolio of assets include Vivendi and Telecom Italia, who sold stakes in Maroc Telecom and Telecom Argentina, to UAE-based Etisalat and Fintech Group, owned by Mexican billionaire David Martinez, respectively. 
 
Finally, analysts will be watching to see whether Telecom Egypt’s interest in the remaining 55 percent stake in Vodafone Egypt held by Vodafone will translate into a deal this year. 
 
In Latin America, Telecom Italia’s sale of TIM Brasil could attract interest from other European telco giants such as Telefonica, Portugal Telecom and Vivendi, who are increasingly focusing their growth efforts on fast-growing markets in Latin America. 
 
Competition rules prevent any of TIM’s three competitors – Vivo, Oi and Claro – from taking full ownership of the company.
 

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