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Verizon confirms acquisition of Vodafone VZW stake

Lowell McAdam, president and CEO, Verizon Wireless

Lowell McAdam, president and CEO, Verizon Wireless

US carrier Verizon Communications has confirmed that it is to acquire Vodafone’s US holdings, including the UK operator’s 45 per cent of Verizon Wireless for $ 130 billion, consisting primarily of cash and stock. The firm said that the deal had unanimous approval from  both boards and will likely close in the first quarter of next year.

Vodafone will trouser $ 58.9bn in cash, which Verizon will finance through credit deals with J.P. Morgan Chase Bank, Morgan Stanley Senior Funding, Inc., Bank of America, and Barclays. $ 60.2bn in common Verizon stock will be issued to Vodafone shareholders, the firm said.

Vodafone has said it will return 71 per cent of the net proceeds of the sale to shareholders, setting aside £6bn for additional investment in its international networks as part of an initiative called Project Spring, to run over three years.

Lowell McAdam, Verizon chairman and CEO, said: “Over the past 13 years, Verizon Wireless has been a key driver of our business strategy, and through our partnership with Vodafone, we have made Verizon Wireless into the premier wireless provider in the US. The capabilities to wirelessly stream video and broadband in 4G LTE complement our other assets in fiber, global IP and cloud. These assets position us for the rapidly increasing customer demand for video, machine to machine and big data. We are confident of further growth in wireless, and our business in its entirety.”

McAdam continued: “This transaction will enhance value across platforms and allow Verizon to operate more efficiently, so we can continue to focus on producing more seamless and integrated products and solutions for our customers. We believe full ownership will provide increased opportunities in the enterprise and consumer wireline markets.”

Vittorio Colao, Vodafone Group CEO, said: “This transaction allows both Vodafone and Verizon to execute on their long-term strategic objectives. Our two companies have had a long and successful partnership and have grown Verizon Wireless into a market leader with great momentum. We wish Lowell and the Verizon team continuing success over the years ahead.”

There had been speculation that Vodafone might look to use some of the proceeds of the sale to drive more in-market consolidation by expanding its multi-play offerings, as it did recently with the acquisition of Kabel Deutschland. But it seems more intent on rewarding shareholders that have waited a long time to realise a return on a US adventure that is now drawing to a close.

Telecoms.com

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