Verizon CEO says buyout of Wireless stake is feasible
09 January 2013 |
The CEO of Verizon Communications, Lowell McAdam, has reportedly said he believes the company can buy out Vodafone’s stake in mobile joint venture Verizon Wireless.
McAdam told the Wall Street Journal that Verizon had been interested in pulling off the deal for some time and thinks that the company has the strength to do so.
Verizon Wireless is 55% owned by Verizon and 45% owned by Vodafone. The joint venture was formed in 2000 and allowed the two to pool their assets and share costs when the US wireless industry was in its infancy.
Verizon tried and failed to buy out Vodafone’s stake in 2006 and given the joint venture’s rise to dominance in the US wireless market this has become an awkward issue for both companies.
There have been rumours that Verizon and Vodafone would end their joint venture for a number of years, but given analyst estimations such a deal could be worth $100 billion, there are questions as to whether it would be feasible.
“I think [a deal] is feasible,” McAdam told the WSJ. “Our wireline business is getting stronger and as that gets stronger, it makes it easier.”
McAdam is cited as saying that Verizon could buy the stake outright or pursue a number of other options. However, he said he didn’t feel compelled to take action and noted that the JV was functioning well, meaning consolidation of ownership wasn’t necessary.
Verizon Wireless made its first dividend payments for years in 2012, first allocating $10 billion then $8.5 billion.
McAdam said Vodafone is aware of Verizon’s position and both companies conduct a yearly review of their operations. He also added that Verizon is searching for any other multi-billion dollar acquisitions.
3h | Alan Burkitt-Gray
4h | Alan Burkitt-Gray
5h | Alan Burkitt-Gray
17h | James Pearce