Vodafone is nearing a transformational deal to buy continental European assets from cable giant John Malone’s Liberty Global and could announce an agreement next week, according to sources.

Talks between Vodafone and Liberty Global about exchanging assets to better compete in Europe’s converging mobile, broadband, and TV markets collapsed yesterday because they could not agree on the value of their businesses.

Vodafone has agreed to buy Germany’s largest cable operator Kabel Deutschland for €7.7bn, adding TV and fixed-line services to help defend against rising competition.