Thursday 20 June 2019

Verizon, Vodafone announce $130bn (€98bn) US deal

The Vodafone logo is seen at the counter of the shop in Prague February 7, 2012. REUTERS/David W Cerny
The Vodafone logo is seen at the counter of the shop in Prague February 7, 2012. REUTERS/David W Cerny

Verizon said today it has agreed to buy out Vodafone's 45pc stake in Verizon Wireless for $130bn, capping its decade-long effort to win full control of the most profitable mobile service provider in the United States.

Under the terms of the deal, Vodafone would get $58.9bn in cash, $60.2bn in Verizon stock, and an additional $11bn from smaller transactions that would take the total deal value to $130bn, Verizon said in a statement.

The deal marks the third-largest announced acquisition in corporate history and British telecom giant Vodafone's exit from the large but mature US mobile market.

The British firm said late on Sunday it was in advanced talks with Verizon to sell its 45pc stake in the Verizon Wireless joint venture for cash and common shares in what would be the world's third-largest deal of all time.

"A deal now is very likely," one of Vodafone's 10 largest shareholders told Reuters. "In terms of where the management teams are, they are both keen to do a deal." Another top 10 investor said the Vodafone management team should be greeted as heroes if they pull off the deal.

The news sent shares in Vodafone up 4pc in early trading, taking the total rise since the news broke of a deal late last week to 13pc, boosted by hopes of a big payout to shareholders, a belief that the remaining assets are undervalued, and the possibility that the company could be open to a takeover.

The move to sell out of the joint venture closes a heady expansionist chapter for Vodafone, one of Britain's best-known companies, which grew rapidly over the last 20 years through a spate of aggressive deals, taking its brand into more than 30 countries across Europe, Africa and India.

The world's largest deal, a $203bn hostile takeover of Germany's Mannesmann in 2000, made the 31-year-old Vodafone the company it is today.

The deal is likely to be the defining event in the careers of Vittorio Colao and Lowell McAdam, the congenial chief executives of Vodafone and Verizon, who rebuilt relations between the two sides to such an extent that they are now close to completing the deal that for long eluded their predecessors.


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