Vodafone Completes £78.2bn Sale Of Its Verizon Wireless Stake
Vodafone exits the US market with massive deal
Vodafone has completed the sale of its 45 percent stake in the US operator Verizon Wireless to its partner in the joint venture, Verizon Communications, for $130 billion (£78.2bn).
The British operator will return a significant proportion of the proceeds to shareholders, but CEO Vittorio Colao could use some of the money raised by the sale to make further acquisitions in Europe as it seeks to expand into fixed line broadband.
Verizon Wireless sale
“Our long and successful partnership with Verizon over the last 14 years has created a great deal of value for our shareholders,” Colao says. “We are returning around US$85 billion to shareholders, which is the largest single return to shareholders in history. The transactions leave Vodafone in a strong financial situation and well positioned to execute its strategy.”
Vodafone secured a £6.3 billion takeover of Kabel Deutschland in Germany last year and has been linked with moves for Fastweb in Italy and Ono in Spain. It has also been suggested that the company could use its estimated $40 billion acquisition fund to purchase US cable operator Liberty Global.
Verizon Wireless was one of the more profitable parts of Vodafone’s business, with European service revenues falling due to economic and regulatory conditions in a number of countries, although the company is confident the situation will improve in the near future, and is investing £19 billion in its worldwide network over the next two years.
Vodafone’s sale could make it a target for Verizon’s US rival AT&T, which is reportedly interested in acquiring a European operator. Any move will not happen for at least six months though, after it issued a statement to the UK takeover panel, which wanted AT&T to come clean about its intentions. And yet it could enter the fray if another company made a bid.