Vodafone sells back 45% stake to Verizon for £84 billion
Vodafone of the UK is one of the largest telecommunications providers of the country which is part of the Vodafone Group, the world’s second largest mobile phone company and holds a stake in the US mobile company Verizon Wireless. It has now sold its 45% stake to the partner US stake-holder, the telecoms group Verizon Communications. The deal worth £84 billion ($130 billion) will be seen as one of the largest deals in corporate history, likely the third largest. Verizon Wireless mobile phone service is one of the most profitable providers of the US. It has been trying for long to gain full control of the company equity.
As per the deal, Vodafone would get £38 billion ($58.9 billion) in cash. £39 billion ($60.2 billion) will be in Verizon stock. Additionally it will get £7 billion ($11 billion) from small transactions. The total value of this deal will add to £84 billion or $130 billion. This deal will help Vodafone to exit from the US mobile market and also help return cash to shareholders, besides planning for further expansions. A chunk of the money can make its way into the British economy, maybe partly through tax and by investments.
There is a controversy brewing, as the deal will be completed through Vodafone’s Luxembourg subsidiaries and other offshore company entities, to minimise tax liabilities. Vodafone’s shares responded by rising sharply in trading. Vodafone will be launching Project Spring, a £6 billion investment plan to accelerate setting up of 4G networks and to invest more in fibre-optic cable besides other things. It would also help the company to invest in Europe.