It's official. Verizon is officially buying back into Verizon Wireless with
a one-hundred-percent controlling interest. Verizon announced today that the
company has reached an agreement with British carrier Vodafone to repurchase the
45-percent stake in Verizon Wireless that Vodafone has owned since 1999.
The fairly massive deal will cost Verizon a total of $130 billion, a mix of
$58.9 billion in cash, $5 billion in notes, and $60.2 billion in common stock.
Verizon will also sell its minority stake in Vodafone Omnitel back to Vodafone
for $3.5 billion, which leaves Verizon $2.5 billion to figure out and generate
using other, undescribed methods.
While the rumored deal was officially approved by the boards of both
companies today, it still has to face both regulatory and shareholder approval.
Which is to say, don't expect to see the deal finalized any time before the
first quarter of next year. After that, however – assuming everything goes well
– Verizon will finally have a bit more control over its wireless fate which, as
Venturebeat's Devindra Hardawar notes, could allow the company to offer up new
subscription plans and new business ventures.
"This transaction will enhance value across platforms and allow Verizon to
operate more efficiently, so we can continue to focus on producing more seamless
and integrated products and solutions for our customers. We believe full
ownership will provide increased opportunities in the enterprise and consumer
wireline markets," said Verizon CEO Lowell McAdam in a statement.
Vodafone CEO, Vittorio Colao, praised the two companies' partnership over
the past decade or so, which has allowed Verizon Wireless to grow "into a market
leader with great momentum."
"We wish Lowell and the Verizon team continuing success over the years
ahead," added Colao, in a statement issued by Verizon.
As if the announcement isn't enough to get Verizon's stock price moving and
shaking when U.S. markets reopen tomorrow — the third-largest corporate deal in
history, writesAllThingsD's Ina fried — Verizon also used its press release to
announce an increase to the company's quarterly dividend. The new rate, 53 cents
per share, is an increase of 1.5 cents (or 2.9 percent) from last quarter, and
moves Verizon's annual dividend up to $2.12 per share instead of $2.06.
As for Vodafone, it remains to be seen whether the company will opt to
start running some acquisitions of its own or, as Fried reports, whether
Vodafone now has a nice, juicy target on its head for other wireless companies
that might be interested in some new telecom assets. According to a report from
Blomberg, it's possible that AT&T might put in a bid.
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