Verizon and Vodafone Complete Their $130 Billion Deal
Published on: 22nd Feb 2014
By: Ian Mansfield
Verizon and Vodafone have completed their US$130 billion transaction and Verizon now owns all of its mobile network subsidiary.
Vodafone is returning a total of $23.9 billion in cash to its shareholders in addition their shares, taking the total to US$82.5 billion. Vodafone is keeping the rest for investments, and also bought Verizon's indirect stake in Vodafone Italy, giving it full ownership.
Vodafone shareholders will get the stock portion of the payout on Feb. 24, with the cash coming on March 4.
The deal however halves the size of the Vodafone Group to a company worth around US$100 billion, pushing it down from the worlds's second largest phone company to the fourth, behind China Mobile, AT&T and Verizon.
"This is a great day for Verizon," said Lowell McAdam, Verizon chairman and CEO. "The new Verizon now has full ownership of the U.S. wireless industry leader in network performance, profitability and cash flow. Acquiring Vodafone's stake in Verizon Wireless provides us with opportunities for greater financial flexibility, enhanced operational efficiency and innovations that will benefit customers. We are confident it will fuel further growth in our business."
Founded in 2000 as a joint venture of Verizon and Vodafone, Verizon Wireless reported $81 billion in operating revenues in 2013.
Timeline to Vodafone's $130 Billion Verizon Deal
March 1994 -- The baby bell Pacific Telesis spins off its AMPS mobile network as Airtouch
July 1994 -- Airtouch and US West agree to joint venture and eventual merger of their wireless networks. Some overlapping assets sold to GTE Wireless.
Feb 1998 -- Merger of Airtouch and US West wireless networks completes. Enlarged company trading as Airtouch.
Jan 1999 - Vodafone and Bell Atlantic fight to buy Airtouch -- Vodafone wins with $56 billion bid just after Bell Atlantic cancelled its $45 billion offer.
April 1999 - USA Inland Revenue Service (IRS) says that the merger of Vodafone with AirTouch will be tax-free for US shareholders.
April 1999 - Bell Atlantic terminates its 5-year old PrimeCo joint venture with Vodafone Airtouch.
June 1999 - Vodafone and Airtouch complete their merger.
July 1999 - Vodafone Airtouch buys CommNet for US$1.36 billion.
Aug 1999 - Vodafone Airtouch increases stake in Italy's Omitel to 21.6%.
Aug 1999 - Vodafone Airtouch transfers New Zealand subsidiary to Australia holding company.
Sept 1999 - Vodafone Airtouch and Bell Atlantic/GTE settle their differences and agree to merge their CDMA networks.
April 2000 - Merger of the US networks approved and starts trading as Verizon Wireless.
June 2000 - Bell Atlantic and GTE complete their unrelated merger to form Verizon Communications.
July 2000 - GTE's wireless operations became part of Verizon Wireless.
July 2000 - Vodafone drops Airtouch from its name.
Oct 1999 - Vodafone Airtouch sells 17.2% stake in E-Plus for US$1.86 billion as a condition of its earlier US merger.
Dec 2002 - Former Airtouch President and Chief Operating Officer, Arun Sarin takes over from Sir Chris Gent as CEO at Vodafone.
June 2007 - Vodafone rejects activist shareholder calls to sell Verizon stake and return US$58 billion to shareholders.
June 2008 - Verizon Wireless acquires regional wireless carrier Alltel for $28.1 billion
July 2011 - Vodafone received its first dividend payment from Verizon Wireless -- of US$4.5 billion.
May 2013 - Vodafone receives US$3.2 billion dividend payment from Verizon Wireless
Sept 2013 - Vodafone announces deal to sell its 45% stake in Verizon Wireless for $130 billion in cash and shares -- will return around US$90 billion to shareholders.
Feb 2014 -- The deal completes and Verizon takes full control of the company.
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