Vodafone Agrees to $130B Verizon Stake Sale
Vodafone has agreed to sell its 45 percent stake in Verizon Wireless in a stock and cash deal worth $130 billion.
Verizon Communications Inc. (NYSE: VZ) is to hand over $58.9 billion in cash and stock worth $60.2 billion to Vodafone Group plc (NYSE: VOD) to secure total ownership of Verizon Wireless . The remaining $10 billion comprises Verizon's 23 percent stake in Vodafone Italy (valued at $3.5 billion), $5 billion in loan notes and $2.5 billion in Vodafone liabilities related to Verizon Wireless that will be taken on by Verizon.
The deal is expected to close during the first quarter of 2014.
Vodafone is to hand all the Verizon stock and $23.9 billion in cash, a total $84 billion (or 71 percent of the net proceeds of the deal) to its shareholders, the equivalent of 112 pence (sterling) per Vodafone share.
Of the remaining $35 billion in cash, Vodafone is pumping £6 billion ($9.3 billion) into a three-year investment program that the operator is calling Project Spring.
Vodafone investors will be cheering. But what happens once the deal closes? Will Vodafone seek out more acquisitions or become a takeover target itself? (See Vodafone: Eat or Be Eaten?)
— Ray Le Maistre, Editor-in-Chief, Light Reading