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There's been plenty of talk, although no action so far. But could the long-rumoured merger between Virgin Media and Vodafone finally be on the cards?

The chairman of Liberty Global - Virgin Media's parent company - has raised the possibility of a link-up between the cable operator and mobile services giant in Western Europe.

Speaking to Bloomberg, US billionaire John Malone said Vodafone would be a “great fit” with his cable business within the region.

He claimed there would be "very substantial synergies" if the two companies could find a way of working together or combining their resources.

While Virgin Media offers up to 152Mb fixed-line broadband, telecoms and pay-TV, Vodafone is a 3G and 4G mobile operator with significant spectrum assets.

Virgin Media currently offers mobile services in the form of SIM-only deals, while Vodafone is gearing up to enter the fixed-line and connected TV markets in 2015.

By joining forces, the companies could potentially meet BT head on, as their common rival tries to drive through the £12.5 billion acquisition of 4G operator EE.

Mr Malone suggested that Vodafone and Virgin Media could work together with mutual benefit in Germany, the Netherlands and the UK specifically.

He said there is "absolutely" a great fit between the two companies in these markets.

"There’s the promise of creating enormous shareholder value if we could work it out," Mr Malone told the news provider.

However, he suggested there are philosophical differences between the two broadband providers, which would need to be overcome in order for any agreement to be reached.

Mr Malone suggested the firms have a different view of how large companies should capitalise themselves.

Any deal could hinge upon whether Vodafone is willing to sell off network assets in other parts of the world, including India and South Africa. Plus of course, whether Vodafone is genuinely interested in linking up with Liberty Global, through its UK arm Virgin Media.

But with Vodafone shares rising to their highest point in almost a year following Mr Malone's comments, it seems there could be shareholder appetite for a deal.

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