Vodafone and Verizon confirm $130 billion Wireless sale
03 September 2013 |
Verizon Communications has officially announced that it is to buy Vodafone’s 45% stake in Verizon Wireless for $130 billion.
The deal was nearing conclusion yesterday morning, and its confirmation marks the third-largest corporate deal in history, according to reports.
Verizon will now take all of Verizon Wireless’s profits and the agreement places the US giant in a strong position for growth in a challenging and competitive mobile market.
Vodafone, meanwhile, will return 71% of net proceeds to its shareholders and the deal significantly reduces the company’s debt.
“We think we have a balanced approach here,” Vittorio Colao, CEO at Vodafone, told reporters.
“We are reducing our debt level, which will enable the company to be very robust and take opportunities if they arise.”
The two companies share a 14-year relationship and in an interview with Reuters, Lowell McAdam, CEO at Verizon, said that the deal’s concept emerged following a session at the gym in San Francisco in April this year.
"We got up early. We were both down at the gym together, we had a brief conversation on the exercise bicycle," said McAdam.
"We looked at the final bit of data, and we said, 'Looks like $130 billion is about the right number and let's see if we can put a deal together around that.'"
The deal was reportedly given the code name of “Project River” after the river Thames in London and river Hudson in New York.
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