Verizon says it still wants to buy Vodafone stake in Verizon Wireless, but has no plans for merger
Verizon had been linked with a takeover after Vodafone appeared unwilling to sell its 45 percent stake in the two companies’ US mobile joint venture, Verizon Wireless, in a $115 billion deal as it would most likely result in a capital gains tax bill in the region of $20 billion.
It had been suggested Verizon was preparing a bid with rival AT&T, with the former taking full control of Verizon Wireless and the latter receiving all of the company’s non-US assets. Such a move would confirm reports AT&T is looking to acquire a European operator. It has previously been linked with EE in the UK and KPN in the Netherlands.
Verizon Vodafone takeover
In a statement, Verizon said it had no intention to acquire or merge with Vodafone, but reiterated its desire to purchase Vodafone’s interest in Verizon Wireless in a move widely seen as an attempt to tell Vodafone shareholders that it was management holding up the sale of any deal.
Vodafone has previously employed a strategy of holding minority stakes in overseas operators until it was in a position to strengthen its position. This has worked well in places like South Africa, but it has faced stalemates in a number of territories, causing investors to place pressure on the company to relinquish such holdings.
Unless a deal can be struck in the US, Vodafone will be stuck with a minority stake in the joint-venture, while Verizon will be unable to gain full control. However analysts have said that speculation about a future sale of the shares will persist, meaning that shares in Vodafone will not fall much further.
In its most recent results, Vodafone reported a worse than expected 2.6 percent decline in revenue during the fourth quarter of 2012 as income from Northern Europe decreased.
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