Britain’s Vodafone Group Plc currently holds a 45 percent stake in Verizon Wireless, the largest carrier in the U.S. Last week it was rumored that both parties were involved in discussions regarding a possible buyout of Vodafone’s stake, analysts believe such a deal might cost Verizon around $130 billion. Vodafone confirmed the talks a few days ago but an agreement has not been reached as of now. According to Reuters, boards of both Vodafone and Verizon have met over the weekend to approve the proposed transaction, a formal announcement is expected tomorrow.
According to the report, under the terms of this deal Verizon Wireless would buy Vodafone’s U.S. holding company, Vodafone Americas, which owns the 45 percent stake in the Big Red apart from several other assets. In order to reduce Vodafone’s tax bill, after acquiring Vodafone Americas, Verizon will sell back the holding company’s European assets to Vodafone. This move alone is expected to save the British telecommunications giant nearly $5 billion. Verizon will reportedly raise $65 billion through a combinations of bonds and bank loans whereas the difference is expected to be covered by Verizon shares. As per sources, JPMorgan Chase & Co, Morgan Stanley, Bank of America Merrill Lynch and Barclays will aid Verizon in raising the $65 billion.