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Vodafone to make £84bn Verizon sale
Vodafone could announce the $130bn (£84bn) sale of its stake in Verizon Wireless as early as today, with the largest corporate transaction in a decade set to produce a record windfall for British shareholders. The Vodafone and Verizon Communications boards were expected to meet over the weekend to approve the change in ownership of America’s largest mobile phone network, with Vodafone relinquishing its 45% interest in the joint venture it created 13 years ago.
Goldman Sachs and UBS are advising Vodafone on the deal, and senior staff at the British company were told to expect a board vote on Sunday, the Wall Street Journal reported. A spokesman for Vodafone declined to comment.
Verizon Communications is expected to pay half of the purchase price in cash, and the balance in its own shares. Vodafone could find itself liable for as little as $5bn in tax. A further $5bn could be deducted from the purchase price in exchange for Verizon relinquishing its stake in Vodafone Italy.
To pay the remaining $120bn, Verizon is understood to be raising $60bn in cash, with the financing in a mixture of loans and corporate bonds arranged by JP Morgan, Morgan Stanley, Barclays and Bank of America Merrill Lynch. The balance will see Vodafone handed a slice of Verizon Communications shares.
As of Friday the US company, which sells fixed line broadband in the United States, had a market value of nearly $136bn. A $60bn payment in Verizon shares would see Vodafone retain a substantial investment in the American telecoms industry.
Vodafone’s exit from Verizon Wireless would be the largest transaction since Time Warner was bought by AOL in 2001, and the third largest in corporate history after the AOL deal and Vodafone’s own purchase of German telecoms group Mannesmann.