Vodafone set to sell Verizon Wireless stake in $130bn deal
The British telecom giant to exit US market with the deal.
Vodafone said on Sunday that it is in advanced talks with Verizon Communications to offload its interests in the US, including 45 per cent stake in Verizon Wireless, for $130bn.
The deal, which would be the third-largest corporate acquisition of all time, will provide Verizon Communications complete ownership of Verizon Wireless, a joint venture of the two companies formed in 2000.
The British telecommunications giant, however, said that there is no certainty that an agreement will be reached.
Meanwhile, Verizon is planning to finance the deal through its stock and cash. It is likely to raise debt through JPMorgan Chase, Morgan Stanley, Barclays, and Bank of America Merrill Lynch for cash.
Doug Colandrea, analyst at RBC Capital Markets, told Reuters that Verizon Communications has the ability to rapidly repay the debt raised to fund the deal as it has 2012 free cash flow of $28.6bn with Verizon Wireless.
Vodafone’ US holding company Vodafone Americas owns the Verizon Wireless stake and a few other assets.
The deal will mark the exit of Vodafone from the US market. It will own assets in Europe and emerging markets like India, Turkey and Africa.
Vodafone could use the funds from the sale to further strengthen its European presence. It acquired Kabel Deutschland for $10.1bn in May 2013.