A massive transatlantic wireless merger may be in the works.
Sources tell Bloomberg that AT&T (T) is contemplating a takeover bid for Vodafone (VOD). The companies are not in formal talks over any bid, but AT&T is said to be developing plans to leverage Vodafone’s existing assets to accelerate the penetration of mobile broadband among European consumers. AT&T is also reportedly determining which Vodafone assets it will sell after the acquisition and which it would keep.
Word of the potential deal comes in the wake of earlier rumors that AT&T and Verizon (VZ) had discussed the possibility of a joint bid for Vodafone earlier this year. Under that arrangement, AT&T would have acquired Vodafone’s operations in Europe, while Verizon would have retained Vodafone’s overseas businesses.
Verizon ultimately opted to pay Vodafone $130 billion to acquire its stake in their U.S. wireless joint venture, Verizon Wireless.
A merger between AT&T and Vodafone would required regulatory approval on both sides of the Atlantic and promises to be a highly complex transaction. If it does go ahead, the combined company would be the world’s biggest telecommunications company, in terms of revenue. It would have a market capitalization of more than $250 billion.
Shares of AT&T and Vodafone both slipped slightly in Friday afternoon trading.