Business World

Tuesday 12 December 2017

Vodafone agrees to sell Verizon stake in massive €98bn deal

Peter Flanagan and Kate Holton

VODAFONE agreed to sell its share in a US mobile network in what will be one of the biggest deals in corporate history.

The telecoms firm admitted it was in "advanced talks" to sell its 45pc shareholding in Verizon Wireless to the Verizon Group in a cash and shares deal that is expected to be worth $130bn (€98.5bn).

That will make it the third most valuable deal in merger and acquisitions history.

The Vodafone and Verizon boards backed the deal and announced the details yesterday evening.

As well as being popular in Britain, Vodafone is one of the most widely held shares in Ireland, thanks to its takeover of Eircell 13 years ago.

The move to sell Verizon closes a heady expansionist chapter for Vodafone, one of Britain's best-known companies, which grew rapidly over the past 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 Vodafone the company it is today.

Speculation has already begun that the 31-year-old company could itself become a bid target, and news of the pending deal sent its shares up 4pc to a more than 12-year high in London trade yesterday.

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

To fund the cash portion of the deal, Verizon has lined up as much as $65bn in financing from four banks: JPMorgan Chase, Morgan Stanley, Barclays and Bank of America Merrill Lynch.

The banks have committed to the financing, which is expected to be split evenly among the quartet.

Vodafone entered the United States in 1999 through a series of deals that resulted in the formation of Verizon Wireless in 2000, with Verizon Communications holding 55pc of the company and Vodafone the rest.

But the partnership has been fraught with difficulties, with both partners at times seeking to buy out the other.

Talks between the two sides picked up in earnest a few weeks ago. (Additional reporting by Reuters)

Irish Independent

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