As reported yesterday, the deal between Verizon Communications and Vodafone Group Plc was all but official, requiring only board approvals. Verizon today announced that both boards of directors had unanimously approved the transaction whereby Verizon Communications will acquire Vodafone’s 45% stake in Verizon Wireless for about US$130 billion.
Lowell McAdam, Verizon chairman and CEO, said: “Over the past 13 years, Verizon Wireless has been a key driver of our business strategy, and through our partnership with Vodafone, we have made Verizon Wireless into the premier wireless provider in the U.S. The capabilities to wirelessly stream video and broadband in 4G LTE complement our other assets in fiber, global IP and cloud. These assets position us for the rapidly increasing customer demand for video, machine to machine and big data. We are confident of further growth in wireless, and our business in its entirety.”
McAdam continued: “This transaction will enhance value across platforms and allow Verizon to operate more efficiently, so we can continue to focus on producing more seamless and integrated products and solutions for our customers. We believe full ownership will provide increased opportunities in the enterprise and consumer wireline markets.”
McAdam concluded: “Verizon Wireless is the greatest wireless company in the world, and a big part of this success was due to the hard work of both partners, Vodafone and Verizon. The timing was right to execute a transaction that benefits both companies and their shareholders. Today’s announcement is a major milestone for Verizon, and we look forward to having full ownership of the industry leader in network performance, profitability and cash flow.”
Verizon will pay Vodafone US$58.9 billion in cash (funded by J.P. Morgan Chase Bank, N.A., Morgan Stanley Senior Funding, Inc., Bank of America, N.A. and Barclays) and issue another US$60.2 billion in common stocks to Vodafone shareholders. It will also issue US$5.0 billion in notes payable to Vodafone and sell its minority stake in Vodafone Omnitel N.V. to Vodafone for US$3.5 billion. The remaining $2.5 billion of the transaction value will be a combination of other consideration.
As for Vodafone which bought the stake for US$70 billion over 10 years ago, the new funds will allow it to “execute on their long-term strategic objectives.” This could include smaller acquisitions in Europe and emerging markets.
As reported earlier, this is the third largest corporate deal in U.S. history.
Source : Verizon Wireless