By Ben Martin and Paul Sandle
LONDON, May 3 (Reuters) - Vodafone is nearing atransformational deal to buy continental European assets fromcable giant Liberty Global and could announce an agreement nextweek, three sources familiar with the matter told Reuters.
Talks between the two companies about a deal for Liberty'sGerman and Eastern European cable operations are nearing aconclusion, according to the sources. "It's the final phase,"one of them said.
Both companies declined to comment.
John Malone's Liberty will report its first-quarter resultson May 9 after the U.S. market closes and Vodafone has itsannual results the following week on May 15.
Either earnings announcement would provide the companieswith an opportunity to unveil a deal. The two sides could stillhit a hurdle, however, the sources cautioned.
The world's second biggest mobile operator said in Februaryit was in talks about buying Liberty's assets in the continentalEuropean countries where they overlap: Germany, Czech Republic,Hungary and Romania.
The two had previously discussed combining operations in2015, but they could not reach agreement on values.
But the logic of bundling Vodafone's mobile networks withLiberty's broadband and cable TV to take on former incumbentssuch as Deutsche Telekom never went away.
The thesis has already been tested in the Netherlands, wherethe two formed a joint venture, VodafoneZiggo, in 2016.
When the talks were announced three months ago, analysts atRoyal Bank of Canada said that based on a typical deal multipleof 11 times enterprise value divided by core earnings, Vodafonecould pay about 20.7 billion euros ($24.8 billion) for Liberty'sUnity Media in Germany and the other assets.
Other media reports have valued a potential deal at 16.5billion euros.
Deutsche Telekom has already voiced its concern over a dealand a lobby group representing Germany's glass fibre industrychimed in on Thursday by saying it should be blocked because itwould create a cable TV monopoly in the country.
The talks coincide with a mergers and acquisitions boom inBritain as company bosses take advantage of the availability ofcheap debt financing and confidence in the global economy tostrike deals.
On Monday, supermarket giant Sainsbury's struck a7.3 billion-pound ($9.9 billion) deal to buy rival Asda fromWalmart, while last week Japan's Takeda Pharmaceuticalagreed the preliminary terms of a $64 billion offer forLondon-listed drugmaker Shire and Comcast madea 22 billion-pound bid for Britain's Sky.($1 = 0.7359 pounds)($1 = 0.8351 euros)(Additional reporting by Pamela Barbaglia and Kate Holton inLondon; Nadine Schimroszik in Frankfurt)
