Vodafone bought out by Verizon to tune of $130 billion
Verizon taking full control of its Wireless Unit
a big step for telecommunications giant Verizon: The company has
finally agreed to pay $130 billion to take full control of Verizon
Wireless from its partner in the United Kingdom, Vodafone.
The agreement is one of the largest in corporate history. It's expected to be finalized in the first quarter of 2014.
\"Today\'s announcement is a major milestone for Verizon, and we look forward to having full ownership of the industry leader in network performance, profitability and cash flow,\" Verizon chairman and CEO Lowell McAdam said in a statement.
The agreement is one of the largest in corporate history. It's expected to be finalized in the first quarter of 2014. Vodafone paid a record $180 billion for Germany\'s Mannesmann in 2000.
Talks had increased over the past few months, with Verizon expressing the need to control all of Verizon. The wireless business is the only reason Verizon is growing: Landlines are swiftly dying out. Verizon has also stopped building out its FiOS Internet and television infrastructure.
Verizon Wireless has 100 million retail connections and operates the largest 4G network. Its 2012 revenues totaled $75.9 billion and its operating margin was nearly 29 percent.
Vodafone said it would use some of the proceeds to invest £6 billion in its network over the next three years. More than 70 percent of the proceeds, $84 billion will be returned to shareholders. This will be a windfall to individuals and thousands of investment and pension funds. Analysts say the company may also pay down its debt.
The telecoms group deepens its presence in Europe as Vodafone\'s presence leaves the United States. Vodafone outbid Liberty Global in June and paid $10.1 billion to buy German cable operator Kabel Deutschland. This will let Vodafone will let the company continue growing in the German market by cross-selling TV and broadband services to its existing customers.
The deal comes at a time of consolidation for the wireless industry. MetroPCS and T-Mobile recently completed their complex merger, and Softbank bought Sprint in July.
Wall Street also stands to benefit from the transaction. Verizon was advised by JPMorgan, Morgan Stanley, Bank of America, Barclays and Guggenheim Securities.
And it\'s borrowing $61 billion from JPMorgan, Morgan Stanley, Bank of America and Barclays to fund the cash element of the purchase.
© 2014 - Distributed by THE NEWS CONSORTIUM
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Respect for Women: That all cultures may respect the rights and dignity of women.
Vocations: That many young people may accept the Lordís invitation to consecrate their lives to proclaiming the Gospel.
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