British group Vodafone is considering selling the 45% stake that it holds in Verizon Wireless, the largest U.S. mobile operator, to Verizon. Following the transaction, Vodafone could get up to $135 billion, according to the Sunday Times newspaper quoted by MarketWatch.
Verizon Wireless is a joint venture owned by Vodafone and Verizon Communications. If Vodafone would sell, the transaction value, one of the largest in history, would be around £88 billion (about $135 billion), close to the market capitalization of £90 billion of the British group and the most profitable overseas investment of a British company . AOL’s takeover of Time Warner in 2001, worth $164 billion, was the largest corporate transaction in the world.
Vodafone recently had a series of “fluid and free-form” discussions with Verizon on the sale of shareholding in the joint venture, a move that would mark the exit of the British group from the U.S. market, according to the Sunday Times.
During the general and open discussions, several options were analyzed, ranging from a merger of the two telecom giants to selling a part of the stake held by Vodafone to its U.S. partner in the joint venture. One of the options was for a merger of the British company with Verizon, worth over $200 billion.
Vodafone tends to exit the U.S. market, where over the last decade it had a difficult, but profitable relationship with Verizon, writes British newspaper. A transaction could be completed in the summer, the Sunday Times said, citing sources among investors, telecom analysts and banking experts.
Verizon Wireless, worth between $240 billion and $300 billion, will probably make a profit of $34 billion this year, according to analysts.
Both companies declined to comment on the report.
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