$130 billion deal between Verizon and Vodafone finalized

By: Zain Nabi  |   September 2nd, 2013   |   Business, News

The decade-long corporate standoff finally comes to an end as Verizon communications seems set to take full power in its wireless business in the US by handing an amount of $130 billion to buy out Vodafone.

 

The British firm was in advanced talk with Verizon to take over its 45% stake in the joint venture of Verizon wireless in the US in return of cash and common shares. This is the world’s third largest deal by now. In 2000, Vodafone made the world’s largest deal of a $203 billion hostile takeover of Germany’s Mannesmann.

 

Many people who are familiar with the news told media that they were expecting the announcement by the company after the close of the London Stock Market on Monday, and after the board members of Verizon are gathered to vote on the proposed transaction for selling the shares of the largest mobile phone operator in the United States.

 

Many of the board members voted to back the deal, according to one person familiar with the matter. Vodafone is considered as one of the biggest and well-known companies of Britain, which over the last 20 years has grown rapidly through a separate aggressive deal, spreading its brand in more than 30 courtiers worldwide.

 

Vodafone would get a total of $130 billion ($60 billion cash, $60 billion Verizon stock, and an additional $10 billion from other smaller transaction) two people familiar with the news told media. The long-running saga would come to end for both Vodafone and Verizon that was trying to take full control over Verizon wireless from many years, but unable to agree a price.

 

There are more than 100 million customers of Verizon Wireless, said Richard Dunbar, investment director at Scottish Widows. He told the BBC: “It has been worth the wait [for Vodafone shareholders]. Previously it [Verizon Wireless] wasn’t generating a lot of cash and it wasn’t paying dividends to the parent company and the relationship between the managers was a poor one. Recently it has been better – and the business has been performing better.”