Report: AT&T hunts for deals in Europe with Telefónica, Vodafone and others

AT&T (NYSE:T) is scouring Europe for potential deals, according to multiple reports, adding steam to the rumors that the company is looking abroad for strategic opportunities after having been thwarted in its attempt to buy T-Mobile USA.

According to a Bloomberg report, which cited unnamed sources familiar with the matter, AT&T informally approached Spanish authorities about buying as much as 29.9 percent in Telefónica, and was rebuffed. Telefónica and Spain's government denied a recent report about that.

However, Bloomberg reported that AT&T has also explored the idea of acquiring assets such as Telefónica's O2 UK unit or its Latin American businesses. The report said AT&T is also looking at assets owned by Vodafone as well as EE, the United Kingdom joint venture between France Telecom and Deutsche Telekom. The Financial Times also reported that EE and Vodafone are potential targets.

AT&T and Telefónica declined to comment, according to Bloomberg.

This isn't the first time AT&T has been linked to rumors about potential mergers or acquisitions in Europe, and AT&T CEO Randall Stephenson has been asked by analysts about it on multiple occasions in the past several months. In January the Wall Street Journal reported that AT&T was hunting for merger and acquisition opportunities in Europe with the belief it can roll out LTE technology there faster and make more money from new pricing schemes.

Complicating matters is AT&T's relationship with América Móvil, in which it owns a 9 percent stake. América Móvil competes in Europe with Telefónica and many other operators, which could complicate regulatory reviews.

Stephenson addressed the issue last week at an event at the Brookings Institution. Though he declined to comment on any specific M&A activity, he reiterated his belief in opportunities outside the United States. Specifically, he said Europe is one of the largest consumer markets in the world, but that LTE coverage there has lagged the U.S.

"Would we like to participate in that? I've said AT&T would love to participate in it. Is it by M&A? I don't know," he said.

For more:
- see this Bloomberg article
- see this FT article (sub. req.)
- see this separate FT article (sub. req.)

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