As it stands right now, Verizon holds 55-percent of Verizon Wireless, with Vodafone holding the other 45-percent. According to some sources who spoke to Reuters, Verizon is looking at buying out Vodafone‘s stake to take full control of Verizon Wireless. Assuming Vodafone is approached by Verizon, nothing says it will need to sell, however, or that it will be interested in doing so.
Says the sources, Verizon has not yet approached Vodafone, but has instead hired advisers and are looking into the possibility. If the proposal is offered, it is said to involve $100 billion in a combination of cash and stocks ($50 billion from financing, the rest in shares), with Verizon being ready to “push aggressively” to have the deal go through.
Back in 2004, Verizon almost scored Vodafone’s stake in Verizon Wireless when the company was trying to purchase AT&T Wireless, something that would have necessitated the sale of its stake. That purchase didn’t go through, however, and as a result Vodafone retained its Verizon Wireless stake. If the proposal is made, some analysts expect that Vodafone will demand more.
One such reason is the large tax bill Vodafone could be faced with if it sells it stake, estimated to come in at about $20 billion, reducing the value of Verizon’s offer. The sources have a different take on that, however, saying that the way the proposal is made would reduce the tax burden to about $5 billion instead, possibly less. Nothing official has been said on the matter.