Verizon agreed to acquire Vodafone’s 45% stake in a $130 billion transaction that gives it full control of the most profitable U.S. mobile-phone carrier. This is the second biggest acquisition deal in history.
The deal has been approved by both companies’ boards and is expected to be completed in the first quarter of 2014. Verizon will pay Vodafone $58.9 billion in cash, with the remaining $60.2 billion paid in stock to Vodafone shareholders.
The acquisition ends a 14-year partnership, and will let Verizon collect all the future profits from the wireless unit, while allowing Vodafone to exit a business whose dividends and operations it didn’t control.
Vodafone plans to use proceeds from the sale to start a new $9.3 billion (£6 billion) network-investment program, called Project Spring, over the next three fiscal years. Vodafone also will return $84 billion to shareholders, including $23.9 billion in cash and the remainder in Verizon’s stock. The deal will result in a U.S. tax bill of about $5 billion under local tax rules, Vodafone said.
Verizon CEO Lowell McAdam said: “The timing was right to execute a transaction that benefits both companies and their shareholders. The announcement is a major milestone for Verizon, and we look forward to having full ownership of the industry leader in network performance, profitability and cash flow.”
By Tim Katoga
