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By Catholic Online (NEWS CONSORTIUM)

9/2/2013 (2 years ago)

Catholic Online (www.catholic.org)

Verizon taking full control of its Wireless Unit

It's a big step for telecommunications giant Verizon: The company has finally agreed to pay $130 billion to take full control of Verizon Wireless from its partner in the United Kingdom, Vodafone.

The agreement is one of the largest in corporate history. It's expected to be finalized in the first quarter of 2014.

The agreement is one of the largest in corporate history. It's expected to be finalized in the first quarter of 2014.

Highlights

By Catholic Online (NEWS CONSORTIUM)

Catholic Online (www.catholic.org)

9/2/2013 (2 years ago)

Published in Business & Economics

Keywords: Vodafone, Verizon, buyout, landlines, wireless


LOS ANGELES, CA (Catholic Online) - The agreement gives Verizon 100 percent ownership of America's largest and most profitable wireless provider. For its 45 percent stake, Vodafone will receive nearly $120 billion in Verizon stock and cash, in addition to Verizon's minority 23 percent stake in Vodafone Italy.

"Today's announcement is a major milestone for Verizon, and we look forward to having full ownership of the industry leader in network performance, profitability and cash flow," Verizon chairman and CEO Lowell McAdam said in a statement.

The agreement is one of the largest in corporate history. It's expected to be finalized in the first quarter of 2014. Vodafone paid a record $180 billion for Germany's Mannesmann in 2000.

Talks had increased over the past few months, with Verizon expressing the need to control all of Verizon. The wireless business is the only reason Verizon is growing: Landlines are swiftly dying out. Verizon has also stopped building out its FiOS Internet and television infrastructure.

Verizon Wireless has 100 million retail connections and operates the largest 4G network. Its 2012 revenues totaled $75.9 billion and its operating margin was nearly 29 percent.
Vodafone said it would use some of the proceeds to invest Ł6 billion in its network over the next three years. More than 70 percent of the proceeds, $84 billion will be returned to shareholders. This will be a windfall to individuals and thousands of investment and pension funds. Analysts say the company may also pay down its debt.

The telecoms group deepens its presence in Europe as Vodafone's presence leaves the United States. Vodafone outbid Liberty Global in June and paid $10.1 billion to buy German cable operator Kabel Deutschland. This will let Vodafone will let the company continue growing in the German market by cross-selling TV and broadband services to its existing customers.

The deal comes at a time of consolidation for the wireless industry. MetroPCS and T-Mobile recently completed their complex merger, and Softbank bought Sprint in July.

Wall Street also stands to benefit from the transaction. Verizon was advised by JPMorgan, Morgan Stanley, Bank of America, Barclays and Guggenheim Securities.

And it's borrowing $61 billion from JPMorgan, Morgan Stanley, Bank of America and Barclays to fund the cash element of the purchase.

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Pope Francis Prayer Intentions for May 2016
Universal:
Respect for Women: That in every country of the world, women may be honored and respected and that their essential contribution to society may be highly esteemed.
Evangelization: Holy Rosary: That families, communities, and groups may pray the Holy Rosary for evangelization and peace.



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