Verizon wants to buy Vodaphone’s 45 percent stake in Verizon Wireless for at least $100 billion according a Reuters report.
The publication’s sources claim Verizon hired advisers to prepare a $100 billion bid to take complete control of Verizon Wireless, though that is likely just a starting bid. Verizon is reportedly considering a “50:50 cash and stock bid” for Vodaphone’s 45 percent stake in the U.S. wireless carrier.
Anonymous Vodaphone stockholders talking to Reuters said they’d expect the company to sell its portion of Verizon Wireless for $125-$130 billion after some negotiation. Verizon will have to put together an enticing bid to get Vodaphone to discuss the possibility first, however.
Verizon has made clear in the past that it wants to buy full control of Verizon Wireless, though this is the first sign of a big coming together. Likewise, Vodaphone CEO Vittorio Colao indicated he has an open mind when it comes to selling his company’s portion of the U.S. carrier.
If Verizon does gain full control of Verizon Wireless, it would leave Vodaphone ready for a potential buyout from another company. Recent rumors claim AT&T recently expressed interest in buying the British company, but it wouldn’t be able to if Vodaphone still controlled a portion of its major U.S. competitor.
Gaining control of Verizon Wireless would give Verizon more flexibility with the money the carrier generates. It would also help Verizon as a whole grow as Verizon Wireless is its most successful unit. That might mean Verizon can expand its FiOS broadband offering, but it’s not entirely clear.
Recent changes in the U.S. wireless industry may help Verizon in its bid. T-Mobile will soon merge with MetroPCS and Sprint is trying to sell itself to Softbank while Dish tries to buy it outright. The consolidation of smaller carriers could create greater competition for bigger players like Verizon, which could mean less profit for Verizon and may push Vodaphone to make a deal sooner.