UK mobile group Vodafone has agreed to sell its 45% interest in its US joint venture, Verizon Wireless, to Verizon Communications Inc for $130 billion.
The deal, which is one of the biggest in corporate history, consists of $58.9 billion in cash; $60.2 billion in Verizon shares; $5.0 billion in Verizon loan notes; $3.5 billion in the form of Verizon’s minority interest in Vodafone Italy. Verizon will also take on $2.5 billion of Vodafone net liabilities relating to the US Group.
Vodafone shareholders will receive 71% of the proceeds of the deal in shares and cash, amounting to $84 billion.
Vodafone intends to invest at least some of the remaining funds on an “organic investment programme” that will see it spend $9.3 billion in its network over the next three financial years.
Vittorio Colao, CEO, Vodafone Group, said that the deal would “greatly enhance Vodafone’s long-term prospects” through Project Spring, a programme of organic investments in 4G, 3G, fibre and broadband, enterprise services across all of the telco’s markets.
“Project Spring will strengthen and accelerate our existing Vodafone 2015 strategy, enabling us to take even greater advantage of the growing global demand for ubiquitous high-speed data,” Colao said. “This will in turn underpin our intention to grow the dividend per share annually, in line with our track record of providing shareholders with sustainable and high quality returns.”
The deal is expected to reach completion in Q1 2014.