Verizon to buy out Vodafone stake for US$130 billion

Verizon Wireless

The third largest U.S. corporate deal in history may be only be a company board approval away. Verizon Communications and Vodafone could announce as early as Monday morning that they have come to terms over a US$130 billion deal taht would see Verizon buy out Vodafone’s 45% share in Verizon Wireless to take complete control of the U.S. carrier.

While Vodafone would only say that it was in “advanced talks with Verizon,” Reuters sources suggest that the only thing left to seal the deal is a couple of company board final approval. Those votes could happen Sunday evening in London and early Monday in New York City, suggesting that an official confirmation of the deal could follow later in the day, likely after the stock market closes in London.

According to two people familiar with the ongoing negotiations, Vodafone will receive US$60 billion in cash, another US$60 billion in Verizon stock and a further US$10 billion from smaller transactions. The cash will come from four U.S. banks: JPMorgan Chase & Co, Morgan Stanley, Barclays Plc and Bank of America Merrill Lynch.

The report is backed by The Wall Street Journal:

Vodafone could use its newly acquired funds to strengthen its European and emerging markets presence with a number of smaller acquisitions. It could also return some of that money to its shareholders.

The deal could explain Verizon’s recent decision to back away from plans to expand into Canada.

Source : Reuters