Verizon rejects tax bill fears for Vodafone sale
19 April 2013 |
Verizon is pushing Vodafone to sell its 45% stake in its US joint venture Verizon Wireless after claiming there would not be major tax obstacles facing any potential deal.
Vodafone’s stake in the joint venture is valued at approximately $120 billion, and the US group has claimed the tax bill placed on the UK group will be less than $10 billion.
Analysts had earlier estimated that Vodafone could face a capital gains tax bill of $40 billion, but Verizon’s CFO Francis Shammo said the deal could be done without high tax fees.
Shammo told analysts that Verizon is extremely confident that such a transaction could be accomplished in a manner that is very tax-efficient and would not result in a tax on the gain in that stake.
Verizon again confirmed its intentions to acquire Vodafone’s stake in the wireless joint venture, following speculation that the company was planning a merger with Vodafone.
People close to the matter have claimed that any potential high tax fees will be levied by non-US assets, held within the joint venture.
The Financial Times reports the tax charge, however, is not Vodafone’s biggest stumbling block, and it is more concerned about how it will cope with divesting its most profitable business globally.