Welcome to the pulse live from bloombergs European Headquarters in london. A big day of news in the telecom space. Up anothereing asset. Here with more is Caroline Hyde. This could be the winning offer. They have upped it by 5 . It seems to be sitting that private Equity Companies have been involved as well. , thePatrick Drahi billionaire behind altice is over offering. He says, overall, it is related to a 500 million euro extra bid in terms of future revenues. People like Patrick Drahis style. 20 years ago, he started altice, now frances biggest cable company. He bolted on and bolted on and now they are a huge player. They like the idea that he wants to get into portugal even more. He is looking at telephone assets to add to the cable assets he already has in portugal. Iserally, this is a man who dealing, making it work. Investors like it. This would be a better deal than oi had previously. O this is unraveling another m a that happened last year. Oi is brazilbased. The reason they want to unload their portuguese assets is that they want to do more consolidation in brazil. They want to build into that bigger area of growth. It was only last year that they bought the assets of portugal telecom. Do athought they could transatlantic juggernaut, make these things work. It seems that that dream has come to an end. They are trying to sell off those portuguese assets to pay down their debt and look at more areas of growth in brazil. At the moment, oi has been other areas of growth there. Are they just spending too much money . This could be the question. I think of altice, people feel that 5 up isnt that much more. They are now considering a half a billion euro extra in terms of revenues. This may be people liking deal. Thank you so much, Caroline Hyde with the latest on one of the telecoms deals we are following today. As Patrick Drahi pushes into portugal, vodafone is considering a bid for Liberty Global. That is a bloomberg scoop. The Telecom Giant would be worth 130 billion. Matt campbell is here. He broke the story. Great job. How imminent is the deal . I think it is important not to think this is coming tomorrow. This is a mediumterm process. Is a lot going on in telecoms, particularly in the u. K. Right now. Bt is talking about buying a mobile player. If bt does so, that is a big competitor for vodafone. It offers what they call quadruple play. Phone, tv, broadband, mobile. Isre this gets interesting vodafone cant do that right now. It becomes more urgent to do something. Liberty global is the big one. It owns virgin media. It also has big operations in germany. You can see the logic behind the deal. That doesnt mean it is happening tomorrow. Is this what is driving convergence . That is the big one. The u. K. Has been behind the curve. In france, people have been buying quad play packages for years. That is the megatrend. The other thing that is going on forinvestors are looking what vodafones next move is going to be. They sold their 45 of Verizon Wireless in the u. S. That is done now. You start to wonder, what is vodafones big plan . Is it going to be a Global Mobile player . Is it going to be u. K. Are western europe focused . So it may not happen tomorrow, but what are the obstacles to the deal . They are many and they are varied. One big one is antitrust. We are focused on the u. K. Germany is where the biggest issues would be. Vodafone owns kabel deutschland. Liberty global also has a huge cable footprint in germany. You can imagine regulators looking for some disposal there. Then there are the financial obstacles. Liberty has a lot of debt on its Balance Sheet. Has some concerns about taking all that debt onto the Balance Sheet of this combined company. Any other deals that we should be watching out for . Deals all the time. Telecom never stops. Thet now it is all about u. K. But that could change. Italy has had speculation about consolidation in the mobile space for a long time. Similarly, we could see consolidation in the nordics. Then there is the question of, what do people like alt ice do next . I is going toh want to do more as will his rival. He has put everyone on notice that he is planning to do big things. Matt, thank you so much. Bloomberg deals reporter Matt Campbell and Caroline Hyde. Media telecom theme today. The freefall of oil continues. West tec tumbled below 65 per barrel. The drop comes amid speculation that prices have further to fall after opecs decision to maintain its Production Output and leave it to the market. Slumping after swiss voters rejected a plan for their central bank to add to its global reserves. Delivery fell as much as 2. 1 . Ratings agency moodys has cut its Credit Rating for japan. O ay reduced it from a 1 ti 3. Moodys pointed to heightened uncertainty. Moodys called the outlook for japan stable. Russian president Vladimir Putin arrived in ankara today for a state visit. Turkey is russias second largest trading partner. The countries are expected to increase cooperation in Energy Projects and discuss Regional Security issues including syria. Turkish russian training has surged because neighboring states are unable to trade with russia. In brussels, the nato secretarygeneral has just the gun a News Conference on policy towards russia. We will bring you all that news from that conference as it happens. Coming up, putin meets erdogan. Russia and turkey look past their differences on syria and ukraine on focus on boosting trade. Live in brussels with highlights from the nato secretarygeneral. That News Conference going on right at the moment. We will have more on that after the break. Welcome back to the pulse we are live on bloomberg tv and radio. Oil continues to fall. The commodity has slid to below 65 a barrel. Ryan chilcote has the story. You were covering opec last week. Now the concern is that oil could just slide continue sliding. Oil is screaming for attention today. 15 sincen about tuesday of last week when i igor,with states with the ceo of rosneft. Then we got that confirmed at the opec meeting. This chart we are showing you right now is the beauty i. Is important because it resembles opec. It reflects the prices that they are getting on the market. Ifis also important because you subscribe to the view that the saudis are interested in a price war, and taking out the shell producers in north dakota, that is the graph to look at. Three prices to keep in mind, 2008 bottomnd of out at 44 a barrel. 42 a barrel is what the International Energy agency says is the breakeven point for most. Finally, 10 a barrel is the price we saw oil retreat to in the 1980s, the last time the saudis had a big show off. The other thing i will mention is volumes. We saw massive volumes on friday. That is people coming back from thanksgiving holiday. There was very little trading on thursday itself. I was looking at some of the calls. Some are saying 40 a barrel. The argument saying, the more the price of oil is under pressure, the more emerging markets will start producing will start consuming. What kind of calls are we expecting . Idea of oil going to 40 a barrel certainly grabs headlines. We have that comment from the it isying that economically feasible only at 42 a barrel. It need not go that low to start shaking out some of the producers. Talk to me about the countries producing. Russia, they are in trouble because they are so dependent on the price of oil and the ruble keeps sliding. The ruble has slid today its biggest slide since january 5, 1999. You have to go back to the beginning of january, 1999 oil is 15 a barrel. 52. 5 rubles to the dollar. That is the low point we reached today. It started the day below 50. It started the year below 33. It is down 38 . Timothy ash said, i think the central bank of russia got the script wrong. Instead of free float, they heard freefall. The problem is that the central bank appears to be prepared to stand by as the ruble depreciates. We heard president putin give an interview to a turkish news raisin see news agency. He said, look, as the ruble theeciates, that fall in oil price is compensated by the depreciation in the ruble and allows us to reach a balanced budget and support growth. What he didnt mention is the consequences for inflation. We heard the deputy head of the Central Banks say inflation is going to reach 10 next year. Inflation is something to watch. They seem to be happy to let the ruble fall because they want to focus on growth and making sure they dont have to cut social programs in the budget. Because that would help the exporters. Thank you so much, ryan chilcote. Now, turkey, where russias president is expected to arrive today to talk trade. He will meet with president putgan as both countries their differences over the situation in ukraine and syria a side. The globalnow is source partners country advisor for turkey. Great to have you on the program. If you look at the two countries and leave the political differences aside, lets focus on the economics. Between turkey and russia, who needs this agreement the most . Could you repeat the question. Russia whos, between is dealing with a lower ruble, dealing with the oil price much lower, and turkey, that depends on gas so much, who needs this agreement the most . Sides are both winning from the recent developments. To turkey isisit certainly historic. Russia has lost a lot of allies in the west because of the crisis in ukraine and needs to reorient its economy towards china, asia and turkey, which means russia will buy more foodstuffs, perhaps more contracting from turkey. As well as more electronic goods. Turkey will buy more energy and natural gas from russia. They would integrate their economies more towards each other. Of course there is a downside to this. The Lower Oil Price hurts russian economy. There are two risks. If there is a financial crisis in terms of russian balance of payments, that will be contagious. Investors may treat russia and turkeys Financial Assets as being in the same risk class. There could be a run in turkish lira, turkish bonds, and equities as well. Extent thato the the incomes of russian families and businesses fall, their ability to purchase turkish assets would also fall. Toi think there is one thing know, turkeys relationship with russia is based on the fact that 60 of turkeys natural gas comes from russia. As soon as you have that strong link, it means that turkey cant thend to do anything else play nice with russia to get more gas. You are right. Will beg about assad completely forgotten. To remind our audience, mr. Erdogan is a deadly enemy of mr. Assad in syria. He wants him to go immediately. Mr. Putin once assad to remain in syria. This controversy has been around for years. When it comes to economics, both mr. Putin and mr. Erdogan are pragmatic enough. Given the economic integration for both leaders, to remind our audience once again, the russian economy is almost in a recession. The turkish economy has slowed down from a narrow growth rate of 6 to 3 . Turkey has been for many years not a full member of the eu. It doesnt get involved in sanctions. Forhis going to be a limit the fact that it still wants to access the eu . Would it not be better off on its own . Limits thethe economic integration with russia the gas came only to a certain extent. Turkey to develop Gas Resources in azerbaijan and Northern Iraq and further beyond the caspian. So turkey can become an alternative route. Turkey cannot really sell to many foodstuffs for russia russia sanctions eu food sources. It has limits. Ofcould run to the walls turkeys membership in nato and 30s aspiration to become an eu an eu member. This is the beginning of a solid friendship between turkey and russia. I dont think it will the eu. Eventually, if the relationship gets there, it could become a concern. Thank you so much, atilla yesilda, turkey advisor at Global Source Partners in istanbul. Coming up, we take a look at what moodys ratings cut means for japan and for Prime Minister s election campaign. Welcome back to the pulse. Back to the news this morning that moodys has cut japans Credit Rating. They cut it by one level to a 1. This comes a day before shinzo abe begins campaigning for election. Joining us from tokyo is andy sharp. What were the reasons moodys gave for the downgrade . Basically, looking at the , they are citing the heightened uncertainty of the capability of japans fiscal reduction goals. Japan has the worlds biggest debt to gdp ratio. The trigger for this may well have been mr. Abe delaying a sales tax increase. Again, heightening concerns among people at the Ratings Company about japans commitment to achieving its fiscal goal. Just give us a sense of the reaction in japan. Ratingsat an election, agencies always get lambasted as too late to the game. It seems like this may be a little bit of unfair timing. Obviously i cant really comment on the timing of this. But it is unfortunate. Indeed. Just starting the election campaign. He just delayed the sales tax. He is election on. His decision to postpone this sales tax hike. It couldnt come at a worse time for mr. Abe. Thank you so much. Glaxosmithkline could have a hard pill to swallow. The company could be axing hundreds of jobs. We will bring you the details after the break. Just a reminder that you can follow me on twitter. Guy johnson is off today. He is still joining in the conversation. We have plenty to talk about. Oilave japan and we have and the price of the ruble tumbling. More on that next. Welcome back to the pulse live from bloombergs European Headquarters in london. Im Francine Lacqua and these are bloombergs top headlines. Vodafone is exploring a combination with Liberty Global. Vodafone andn liberty would create a phone, internet and tv giant worth more than 130 billion. Vodafone is holding internal deliberations about the linkup but there are no formal negotiations underway. Swiss voters rejected all three ballot proposals put forward in a referendum on sunday. They voted against a measure requiring their central bank to hold 20 of its assets in gold. Another would have introduced strict immigration protocol and a third would have abolished the system allowing wealthy foreigners to duck income and wealth taxes. George osborne has given an indication of what his priorities will be when he presents his statement on wednesday. Speaking on the bbc, osborne said that improving britains export competitiveness would be a focus . We need to do more. We need to improve our productivity. We need to make sure we export more. Inn our main export markets europe are week, we need to look further afield. We need to make sure that our kids have the right skills. You are going to see all these things undressed on wednesday as part of an ongoing plan to prepare this country for the global race and the challenges we all face in the modern economy. Bring you live coverage from the chancellors statement this wednesday right here on bloomberg tv. Is saying goodbye to fossil fuels and will spin off its conventional Power Generation unit. Hans nichols joins us now from berlin with the story. If they sell these assets, what will be left of the company . They say the Holding Company will have about 40,000 employees and will focus on Energy Transmission and renewables. Here is the challenge. A collapse inve wholesale electricity prices. So all the utilities in germany have been struggling. This is all in reaction to Angela Merkels energy change. She wants 80 of germanys fuel sources the renewable by 2050. They are at 25 now. They have a bit of always to go. 35y want to get up to 30 , percent, 40 , all the way up to 80 . Here is what the ceo of e. On had to say theieve this is announced impairment charge. You look at their last quarter. 90 million net loss on income. This is a company that is struggling. Thank you so much. Hans nichols. He very latest on e. On glaxosmithkline could be axing hundreds of jobs from the u. S. It is a huge shakeup. It could be acknowledged, announced, as soon as wednesday. The president of the north American Unit is due to speak to the employees in the u. S. That day. Put it into context, hundreds of jobs. There are 17,000 employees in the United States. It is not going to be a huge percentage, but what we are seeing is glaxosmithkline tackling a crucial area for them. The u. S. Is about a third of all their sales and sales havent been doing that well. They have competition in their asthma medication. We are seeing sales fall as much as 30 . New drugs are coming online. They are not doing as well. The growthve not got drivers, you start looking at your profitability by cutting costs. When you dont incentivize the salesforce is that they could perform less well. Is this one of the main worries . This is what many analysts are pointing out. Glaxosmithkline has to shake up their u. S. Unit because they are being investigated. There was all this concerned that they werent selling drugs in the appropriate manner. 3 billion. Ned now they have had to reincentivize their sales target by saying, we are not going to pay you on bonuses based on how many drugs you sell. We are going to pay you a bonus based on your knowledge base. How do you incentivize a sales team to sell more if it is just based on your knowledge . Many analysts are saying that is not driving revenue. You have to find another way of getting your sales force out there. Those sorts of shakeups that were announced, 2010, it was quite foresighted to be trying to steer the company away from that. If you are seeing profits fall, investors want to see a sh