Verizon in talks to buy out Vodafone stake: sources

Thu Aug 29, 2013 6:52pm EDT
 
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By Kate Holton and Sinead Carew

LONDON/NEW YORK (Reuters) - Verizon Communications is close to buying the remaining stake in Verizon Wireless from Vodafone Group PLC it does not own for potentially $130 billion, according to people familiar with the talks, in what could be the third-biggest deal of all time.

Verizon, the number one U.S. mobile carrier, has made no secret of its desire to gain full ownership of a network that is growing fast and generating billions of dollars in free cash flow, hoping to reap the monetary benefits.

Now, rising interest rates, rapidly intensifying competition and Verizon's share price, which is off 12 percent in recent weeks, have lent urgency to get a deal done before raising money becomes too expensive.

Across the ocean, Vodafone's Chief Executive Vittorio Colao has bided his time, making it clear he would only sell the 45 percent stake at what he considered the right time and most importantly the right price. The deal would leave the world's second largest mobile operator with assets in Europe and emerging markets such as India, Turkey and Africa and money to give back to shareholders.

The deal has been years in the making. Vodafone came close selling out in 2004, when it bid for AT&T Wireless and would have had to shed its Verizon stake. The British company, however, lost that bid to Cingular, and has since held on to the Verizon Wireless stake for its exposure to the U.S. wireless market.

The Verizon Wireless joint venture started in 2000.

BREAKTHROUGH?

A few weeks ago, Verizon and Vodafone resumed talks discussing a sale for around $130 billion, according to a person familiar with the situation, who asked not to be named. Two sources said an announcement could come as soon as next week.   Continued...

 
A Vodafone logo is seen on a mobile internet dongle connected to a laptop in London November 9, 2010. REUTERS/Suzanne Plunkett