61°
Partly sunny
THU
 66°
 47°
FRI
 60°
 42°
SAT
 64°
 45°
SUN
 66°
 43°
MON
 76°
 44°

Verizon agrees to buy stake from Vodafone for $130 billion

  • A Monday, July 28, 2008 photo from files showing Eric Roden speaking on his cell phone as he walks past a Verizon store in Portland, Ore. (AP Photo/Don Ryan, File)

NEW YORK — Verizon will own its wireless business outright after agreeing to a $130 billion deal to buy the 45 percent stake of Verizon Wireless owned by British cellphone carrier Vodafone.

The buyout, the second-largest acquisition deal on record, would give Vodafone PLC additional cash to pursue its expansion ambitions in Europe. It would also give Verizon Communications Inc., the opportunity to boost its quarterly earnings, as it would no longer have to share a portion of proceeds from the nation's No. 1 wireless carrier with Vodafone.

The deal isn't expected to have much of an effect on Verizon consumers or on the company's operations. Vodafone had little influence on Verizon Wireless' day-to-day operations, and the two companies have kept out of each other's territory.

The Verizon-Vodafone partnership started in 2000, when what was then Bell Atlantic combined its East Coast wireless network with Vodafone's operations on the West Coast. Vodafone had entered the U.S. market a year earlier by outbidding Bell Atlantic to buy AirTouch Communications Inc. of San Francisco.

Verizon has had a long-standing interest in buying out its partner, but the two companies hadn't agreed on a price until now. Analysts said Verizon wanted to pay around $100 billion for Vodafone's stake, while reports suggested that Vodafone was pressing for the $130 billion.

The largest deal on record is Vodafone's $172 billion acquisition of Mannesmann AG in 2000, according to research firm Dealogic. Verizon's buyout of Vodafone should be completed in the first quarter of 2014, the companies said.

Vodafone is already one of the world's largest cellphone companies and has its sights set on dominating media services in Europe, its biggest market. The company is making a takeover bid for Germany's biggest cable operator, Kabel Deutschland.

The deal comes amid a changing telecommunications landscape in the U.S. The wireless business has been lucrative for Verizon Communications as traditional landline services decline. But the company faces growing competition in a saturated market. No. 4 T-Mobile US Inc., for instance, is making a resurgence after shattering industry conventions, including two-year service contracts.

© The Press Democrat |  Terms of Service |  Privacy Policy |  Jobs With Us |  RSS |  Advertising |  Sonoma Media Investments |  Place an Ad
Switch to our Mobile View