Verizon Communications to make bid for Verizon Wireless
Verizon Wireless is currently co-owned by the Verizon Communications and the Vodafone Group. Now, Verizon wants to make a bid for full control.
Verizon Communications and the Vodafone Group created Verizon Wireless in a joint venture in 1999, with 55% of the company being owned by Verizon Communications. Now, they want full control of the company are are willing to make a $100 billion bid composed of cash and stock in order to purchase the remaining 45%. The bid has not officially been proposed yet, but Verizon has hired legal and banking advisors and is expected to discuss the buyout in detail during a shareholder's meeting next week.
According to sources who spoke to Reuters, Verizon Communications has been looking to buy out its British partner for ten years, and is “ready to push aggressively for a deal”. It is unknown if Vodafone is interested in such a deal, but if it were to happen, it would give Verizon more flexibility in how to manage the wireless company's cash flow. It is likely that a deal would benefit Vodafone too, whose CEO Vittorio Colao has been trying to streamline the company's asserts after years of rapid expansion.
Verizon Communications currently has record low interest rates and shares performing at their strongest in ten year, having risen 20% this year alone. The deal would involve raising 50% of the money through bank financing, and the other 50% would simply come from those shares.