TalkTalk and Virgin Media O2 resume their merger negotiations

As reported by the Telegraph, Virgin Media O2 has reopened talks about possibly purchasing TalkTalk's consumer segment.

A previously discussed £3 billion purchase, including debt, was postponed two years ago owing to market and regulatory difficulties. This step indicates fresh interest.

TalkTalk is contemplating selling off its consumer division as part of a larger reorganisation to handle the urgent need to repay its debt.

With the recent purchase of half a million Shell clients from Octopus Energy, TalkTalk's consumer sector, which now boasts 2.4 million residential subscribers, has grown.

With this possible purchase, VMO2 hopes to increase the size of its retail clientele and expand its presence in the value area of the market.

A wholesale arrangement with TalkTalk may be a significant part of the transaction; VMO2 plans to eventually move these consumers to its full-fibre network.

There's no guarantee that a deal will be reached, though, as the negotiations are apparently still in their early stages.

TalkTalk has already sold its business division to an entity controlled by its key investors for £95 million, but its financial duress has forced it to begin the process of dismantling its businesses.

(Sources: investing.com, proactiveinvestors.co.uk)