Talks between Vodafone and Liberty Global about a merger of European businesses have ended after several months.

Vodafone and Liberty – which owns UPC in Ireland and recently took over TV3 – have long been linked with a potential £120 billion merger, though they surprised the market in June when they announced talks only around a swap of business assets.

Analysts still saw the potential for a full merger of their European businesses, though those close to the British telecoms group played down any transaction larger than a swap of businesses in certain countries. Yesterday Vodafone confirmed talks about an asset swap had ended, which will disappoint many in the telecoms market who had expected the creation of a dominant pan-European mobile and fixed line business.