Vodafone has confirmed it is in talks with Verizon amid speculation it will relinquish its stake in Verizon Wireless.
Vodafone Group owns 45% of the American mobile phone company, and an estimated $130bn (£83.8bn) sale will end the long-term partnership between the two operators. The speculation has contributed to Vodafone’s shares reaching its highest value in over a decade, jumping 9.6% and adding more than $13bn in market value. According to a report in Bloomberg, Verizon is reportedly working with several banks to raise the capital needed to fund the buyout.
Any proceeds from a possible sale are reportedly likely to be injected into the operator’s European arm, which is being hit by the challenging economic situation in southern European countries.
Leopold Salcher, an analyst at Raiffeisen Capital Management, told Bloomberg: ‘This deal is extremely important for Vodafone for its convergence strategy toward more cable assets because pure mobile operators will certainly experience capacity bottlenecks in the future.’ He added ‘$130bn was a very good price for this asset.’
Despite conceding the talks with Verizon were ongoing, Vodafone said ‘there is no certainty an agreement will be reached’.
Author: Matthew Campelli