updated 10:47 am EDT, Thu August 29, 2013
Potential $130B sale of 45-percent stake to Verizon in future
British carrier Vodafone has confirmed that it is in talks to sell its stake in Verizon Wireless to Verizon. The discussions, which have been rumored to have taken place over the last few months along with a possible merger, could lead to Verizon paying around $130 million for Vodafone's share in the carrier, and in turn taking complete ownership of the wireless company.
Sources of Bloomberg state that Verizon is working with a number of banks to raise around $10 billion from each, in order to finance around $60 billion of the deal. It is suggested that Verizon could also sell a 23-percent stake in Vodafone Italia back to Vodafone as part of the purchase, saving it from having to raise 4 billion euro ($5.3 billion).
In response to media speculation, Vodafone released a statement, confirming "it is in discussions with Verizon Communications Inc. regarding the possible disposal of Vodafone's US group whose principal asset is its 45-percent interest in Verizon Wireless." Despite confirming the rumors of the advanced discussions, Vodafone notes "there is no certainty that an agreement will be reached."
The proceeds of the deal will help Vodafone shore up its businesses in its native Europe. It has been working on removing itself from any joint ventures where it does not have full control, including SFR in France and other similar carriers. The proceeds of the Verizon Wireless sale would give the company a considerable war chest to buy outright companies it partly owns, as well as acquiring others that it has been looking at for quite some time. The company could also expand its Africa holdings, somewhere that Vodafone executive Nick Read predicts could have higher profits than some parts of southern Europe in the next few years. There is also a chance that some of the proceeds could end up heading towards Vodafone shareholders as a dividend payment.
If the two companies do agree to proceed with the sale, it is suggested that an announcement could be made as early as September 2nd.