As some of you probably know, part of Verizon Wireless is owned by UK company Vodafone. Vodafone owns about 45% of the company, which has been a pretty lucrative stake considering Verizon Wireless’s massive profits in the past few years. According to a recently proposed deal, however, Verizon will buy out that 45% stake for a whopping $130 billion in cash and stock options. That’s a pretty hefty up-front cost, but it would allow Verizon to keep 100% of their wireless profits.
The Wall Street Journal seems to think the deal will go through without a hitch, simply because it doesn’t really affect customers or violate any antitrust laws, considering Verizon already owns and operates a majority of the business. Vodafone will obviously start to see a massively declined profit without owning Verizon stake, but with $130 billion, it shouldn’t be hard to find something else to invest into.
The deal is expected to close sometime in the beginning of 2014. We’ll keep you updated if anything else pops up or changes.
source: Wall Street Journal