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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.

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Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.