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Verizon and Vodafone strike deal

September 2, 2013

Verizon Communications has agreed to pay $130 billion to buy Vodafone out of its US wireless business. The deal marks the third biggest corporate takeover in history.

epa03550003 (FILE) A file photo dated 12 April 2006 showing a sign on the side of one of the Verizon buildings in New York. Reports state Verizon on 22 January 2013 reported a pension-liabilities related loss of 1,93 billion USD. The company said additional losses occurred due to Hurricane Sandy-related costs. However, the company reported a 8.5 per cent year-over-year increase in service revenues in 4Q 2012; 8.4 per cent year-over-year increase in retail service revenues. EPA/JUSTIN LANE *** Local Caption *** 01911104 +++(c) dpa - Bildfunk+++
Image: picture-alliance/dpa

US telecom giant Verizon and Vodafone announced Monday that the British company would sell its 45 percent stake in their Verizon joint venture for $130 billion (99 billion euros).

Under the terms, Vodafone will get $58.9 billion in cash, $60.2 billion in Verizon stock, and an additional $11 billion from smaller transactions. The deal is due to close in the first quarter of next year.

The deal is also a defining event in the careers of Vittorio Colao and Lowell McAdam, the chief executives of Vodafone and Verizon.

"We think we have a balanced approach here," Colao told reporters. "We are reducing our debt level which will enable the company to be very robust and take opportunities if they arise," he said.

McAdam said the deal was a major milestone for Verizon. "We look forward to having full ownership of the industry leader in network performance, profitability and cash flow," he said.

Created in 2000, Verizon Wireless is the biggest US mobile phone company operating more than 100 million lines and employing 73,400 people.

The acquisition would be the third-largest in corporate history after Vodafone's takeover of Germany's Mannesmann mobile company for around 172 billion euros ($203 billion) in 1999, and the merger between Time Warner and AOL worth about $165 billion.

hc/ipj (Reuters, AFP, dpa)