Verizon is said to be in the late stages of a deal to buy out Vodafone’s share of its mobile phone business. The company has been looking to take back control of the thriving enterprise, aiming to pay approximately $130 billion for Vodafone’s 45% stake. Verizon is America’s largest telco with over 100 million subscribers.
The deal is said to have taken precedence over Verizon’s exploration into Canada’s wireless market, which may not happen now that the company’s rumoured $3 billion investment may not turn a profit for five years. According to insiders familiar with the Verizon-Vodafone deal, Canada was used as a bargaining chip of sorts, a pawn to convince the European operator to sell its considerable stake. According to an agreement between the two companies, Verizon is barred from investing in other network providers.
The US has seen a rash of investment in recent years from Verizon’s competitors, namely AT&T, Sprint and T-Mobile. The former attempted to purchase T-Mobile, which was blocked by the FCC; Sprint was recently purchased by Japan’s Softbank; and T-Mobile merged with regional operator MetroPCS.
Verizon may still put down a deposit for the upcoming 700Mhz spectrum auction, but is not likely to move to purchase new entrants Wind Mobile or Mobilicity until after January, if at all. Whether it will still pick up two blocks of complementary 700Mhz spectrum in high-density regions remains to be seen, but those looking at Verizon as the incoming saviour of Canada’s wireless industry may have to settle for the status quo.
Update: A press release was just sent out that confirmed a $130 billion agreement for Verizon to acquire Vodafone’s 45% stake in its business. The release noted that “The transaction was unanimously approved by the boards of directors of Verizon and Vodafone,” which is consisting primarily of cash and stock and still needs to meet regulatory approvals.
Lowell McAdam, Verizon chairman and CEO, said “Verizon Wireless is the greatest wireless company in the world, and a big part of this success was due to the hard work of both partners, Vodafone and Verizon. The timing was right to execute a transaction that benefits both companies and their shareholders.” No word yet if Verizon is planning to officially enter the Canadian market. – IH
[source] WSJ [/source] [via]The Globe & Mail[/via]
