Verizon Buys Vodafone’s 45% Interest in its Mobile Unit

Verizon Communications now fully owns Verizon Wireless. The telecommunications firm has acquired partner Vodafone Group’s 45% stake in its mobile unit, Verizon Wireless. About $130 billion in the form of cash and stock changed hands for the transaction.

The initial agreement for the acquisition was announced in as early as September last year. Back then, Verizon pointed out that it wanted to take 100% ownership in the business, which is currently the biggest mobile network in the US.

Analysts expect that the transaction would give Verizon more flexibility and more authority to do what it wants to do with the business. It is expected to help further improve the business’ financial position in the coming years.

Full ownership 

Unlike rival AT&T, which has fully owned its own mobile business for many years now, Verizon had been operating Verizon Wireless since its establishment as a joint venture with the London-based partner. Buying the 45% stake it did not own gives the company full control of the profitable business.

The transaction would instantly add up to 10% to Verizon’s earnings per share. That would exclude adjustments. It can be recalled that Verizon Wireless posted $81 billion in revenue in 2013.

Integrated wired and wireless services 

This deal could also lead to integration of the wired and wireless services. However, Verizon still does not want to give details about that plan. Several months ago, it said the buyout would help enhance its capacity to offer what it described as services that are ‘seamless and integrated.’ The combination of the wired and wireless units would also translate to more efficiency and greater financial flexibility for Verizon.

For many years, Verizon had been trying to buy back the stake it did not own in the wireless business. Vodafone has yet to disclose the reason behind its decision to finally give in to the proposal. Sources claim that the British telco might use the proceeds from the sale to acquire other businesses in Europe. The company is reportedly eyeing various firms, including a number of cable operators.

Meanwhile, there are also speculations that AT&T is considering buying Vodafone. In January, AT&T was quoted as saying that it does not intend to mount a bid for the London-based telecom operator, at least within the next six months. However, the US-based company said it might change its plans if a competing bidder would emerge soon. 

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About the author

Drew is a regular contributor covering trending topics.