Verizon Makes US$700 Million Offer for WIND Mobile?

WIND Mobile

It appears that Verizon’s “exploratory talks” with WIND Mobile proved positive enough to move on to the next stage. According to two The Globe and Mail sources, the US carrier has made an initial offer to acquire WIND Mobile for US$700 million.  The news comes only days after Orascom withdrew its offer after “discussions with the government of Canada.”

VimpelCom, the company trying to sell WIND Mobile, previously estimated that it could get between US$500 million and US$1 billion for the carrier. This puts Verizon’s offer right in the middle and suggests that VimpelCom could even get a bit more for it.

Verizon has also begun discussions with Mobilicity, another of the smaller Canadian carriers. Should this deal also go forward, the price tag there would likely be significantly less. The now dead TELUS acquisition deal valued Mobilicity at CA$380 million. For its part, Mobilicity is currently looking at restructuring options but its investors would likely welcome the acquisition.

The acquisition or acquisitions would allow Verizon to enter the Canadian market. Its plans could also include participating in the upcoming 2014 700MHz spectrum auction.

Verizon’s potential entry into Canada was made possible by recent changes made by the Canadian goverment to telecom foreign ownership rules. Companies with a market share of 10 percent or less can now be acquired by foreign companies.

WIND Mobile currently has about 600,000 subscribers. Mobilicity has another 250,000. In contrast, Verizon has about 100 million subscribers.

Source : The Globe and Mail