Vodafone sells Verizon stake for $130billion [Big News Network (United Arab Emirates)]
(Big News Network (United Arab Emirates) Via Acquire Media NewsEdge)
LONDON/NEW YORK British telecommunications giant Vodafone has agreed to sell its U.S. wireless joint-venture stake to partner Verizon in a $130 billion deal in one of the biggest deals in corporate history.
Vodafone has sold its 45% stake in Verizon Wireless to US telecoms group Verizon Communications.
The $130bn (pounds 84bn) deal was announced by Vodafone after the close of trading on the London Stock Exchange.
The transaction comprises pounds 38 billion in cash, pounds 39 billion in Verizon shares, pounds 3.2 billion in loan notes (i.e. an IOU), pounds 2.3 billion in the form of Verizon's 23% stake in Vodafone Italy, and pounds 1.6 billion from transferring liabilities to Verizon.
Vodafone will return $24 billion in cash and all the Verizon shares to its shareholders. It will also invest $6 billion in a modernisation programme entitled Project Spring.
This will include accelerated investment in 4G so that 90% of its five main markets are covered by 2017, mobile payments, and an enhanced enterprise service portfolio, including IP-VPN, cloud services, hosting and machine-to-machine communications.
"Project Spring will strengthen and accelerate our existing Vodafone 2015 strategy, enabling us to take even greater advantage of the growing global demand for ubiquitous high-speed data," said Vodafone CEO Vittorio Colao.
The deal is still subject to shareholder approval and regulatory clearance from the US Federal Communications Commission.
If all the conditions are met, the deal will close in the first quarter of 2014, the two companies said.
The buyout would be second only to Vodafone's $172 billion acquisition of Mannesmann AG in 2000, according to research firm Dealogic.
Vodafone's board had already met Sunday to OK the deal, which the company said would "substantially comprise a mixture of Verizon common stock and cash."
The Guardian reported that the split between shares and cash would be roughly 50-50.
The Wall Street Journal called it the second-most-important acquisition of all time, after Vodafone's takeover of Mannesmann.
Created in 2000, Verizon Wireless operates more than 100 million lines and employs 73,4000 staff members. Headquartered in Basking Ridge, New Jersey, the company generated revenues of $75.9 billion in 2012.
Verizon has been looking to take full control of the joint venture for many years, but negotiations have floundered on the sale price, with the U.S. company hoping to pay around $100 billion for Vodafone's stake.
The deal is likely to be structured so that Vodafone is shielded from a hefty tax hit.
(c) 2013 Big News Network. All rights reserved. Provided by Syndigate.info an Albawaba.com company
[ Back To Technology News's Homepage ]