Verizon Communications to acquire 45% stake in Verizon Wireless from Vodafone Group
Sep 04, 2013 (MarketLine Financial Deals Tracker via COMTEX) --
Verizon Communications, Inc. (VC), a provider of broadband, video and wireless, and wireline services, has entered in to a definitive agreement with Vodafone Group Plc to acquire a 45% stake in Verizon Wireless, Inc., a provider of wireless services, for $130,000 million. Both VC and Verizon Wireless are based in the US.
Vodafone is a UK-based provider of mobile telecommunications services. Verizon Wireless is a joint venture between VC and Vodafone.
The consideration constitutes of $58,900 million in cash, approximately $60,200 million to be distributed to Vodafone shareholders, subject to a collar arrangement with a floor price of $47 and a cap price of $51 that will determine the maximum and minimum number of shares to be issued upon closing of the transaction. In addition, VC will issue $5,000 million in notes payable to Vodafone, and VC will sell its 23.1% minority stake in Vodafone Omnitel N.V. to Vodafone for $3,500 million. The remaining $2,500 million of the transaction value will be a combination of other consideration.
To fund this portion of the consideration, VC has entered into a fully executed $61,000 million bridge credit agreement with J.P. Morgan Chase Bank, N.A., Morgan Stanley Senior Funding, Inc., Bank of America, N.A. and Barclays. Verizon intends to reduce the commitments under the bridge credit agreement with the issuance of permanent financing.
In addition, VC expects to maintain capital structure, balance sheet and financial policies consistent with investment-grade credit metrics, in part based on 100% access to Verizon Wireless' cash flow.
The transaction will be immediately accretive to the VC's EPS (earnings per share) by approximately 10%, without any one-time adjustments.
Following the transaction, VC will own 100% stake in Verizon Wireless. The transaction was approved by the Boards of Directors of VC and Vodafone.
The transaction is expected to close in the first quarter of 2014.
Rumor (August 29, 2013):
According to Bloomberg, VC is planning to acquire a 45% stake in Verizon Wireless from Vodafone for approximately $130,000 million.
Reportedly, as part of the transaction, VC will sell back to Vodafone its 23% stake in Vodafone Italia, which would be worth around EUR4,000 million.
Guggenheim Securities, LLC, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, Barclays, BofA Merrill Lynch and Paul J. Taubman are acting as financial advisors to VC, and J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC also rendered fairness opinions in connection with the transaction. Wachtell, Lipton, Rosen & Katz and Macfarlanes LLP are acting as legal counsel to VC, and Debevoise & Plimpton LLP is advising VC on its debt financing.
Deal Value (US$ Million) 130000
Deal Type Acquisition
Sub-Category Minority Acquisition
Deal Status Announced: 2013-09-02
Target (Company) Verizon Wireless, Inc.
Acquirer (Company) Verizon Communications, Inc.
Vendor (Company) Vodafone Group Plc
% Acquisition 45%
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