Vodafone Group confirmed its anticipated deal to sell its 45 per cent stake in Verizon Wireless to partner Verizon Communications, in a $130 billion (£84 billion) cash and stock deal.
Verizon Communications will pay some $58.9 billion in cash, with $60.2 billion in shares.
Announced on September 2, 2013, Verizon would buy the remaining 45% stake that Vodafone owns in Verizon Wireless for $130 billion. Upon the closing of the deal in the first quarter of 2014, it will be the third largest in history.
Vodafone Group is a British multinational telecommunications company headquartered in London. It is the world’s second-largest mobile telecommunications company measured by both subscribers and 2011 revenues (in each case behind China Mobile), with 439 million subscribers as of December 2011, according to Wikipedia.
Some $5 billion will be in the form of Verizon loan notes and $2.5 billion through the assumption of debt related to the US business by Verizon Communications. The final $3.5 billion will come from Vodafone taking on Verizon’s 23 per cent stake in Vodafone Italy.
Following completion, Vodafone shareholders will receive all of the Verizon shares and $23.9 billion in cash, meaning 71 per cent of the net proceeds (totalling $84 billion) are given to investors.
As a result of the deal, Vodafone said it intends to implement “a new organic investment programme”, called Project Spring, to “establish further network and service leadership through additional investments of £6 billion over the next three financial years”.
Specifically, the company has noted an accelerated 4G network build, covering 90 per cent of its five main European markets by 2017; deeper 3G coverage and capacity in its mature markets; and additional 3G voice and data coverage in emerging markets.
It also singled out “faster deployment of mobile payment services.”