Report: Verizon wants to resolve Vodafone relationship in 2013
Verizon Communications (NYSE:VZ) and Vodafone have held talks that range from a merger of the two giant phone companies to Verizon merely buying Vodafone's 45 percent stake in their Verizon Wireless joint venture, according to a Bloomberg report. The report said Verizon wants to find a resolution to the two carriers' relationship this year.
The report is the latest in a seemingly endless line of rumors and speculation about the fate of Verizon Wireless and Verizon's relationship to Vodafone. Top executives at both companies say they have grown tired of the constant speculation.
Citing unnamed sources familiar with the matter, the Bloomberg report said that the two firms discussed a full merger as recently as December but did not make much progress because of issues like who would lead the combined company and where its headquarters would be--Verizon is based in New York City and Vodafone is based on London. A much more likely scenario, the report said, is that Verizon will buy Vodafone's stake in Verizon Wireless, which analysts estimate is worth $115 billion.
Verizon and Vodafone declined to comment, according to Bloomberg.
Pointedly, the report noted that there are no current formal discussions of a merger and talks about the sale of Vodafone's Verizon Wireless stake haven't progressed to substantial negotiations. The report said the talks on both are likely to restart again later this year.
Verizon Wireless is Verizon's most profitable division and has been a cash cow for both parent companies. At the end of the year the unit paid $8.5 billion in dividends to the parents following an earlier $10 billion payment Verizon Wireless distributed in January 2012. The $10 billion dividend payment was the first Verizon Wireless had made since 2005.
Verizon executives have said they are not contemplating changing the carrier's relationship with Vodafone right now, though they have consistently expressed a desire to gain full control over Verizon Wireless.
"Well, I don't think our appetite in the last 12 years has changed. I think we have always said we would love to own their 45 percent," Verizon Communications CFO Fran Shammo said Monday during an investor conference. "I don't think that changes, but at this point there is really nothing new to report."
In February Vodafone CEO Vittorio Colao said the operator does not need to sell its stake in Verizon Wireless in order to invest more in Europe. He said that the company has a healthy balance sheet and can make acquisitions if necessary.
- see this Bloomberg article
- see this Verizon transcript (PDF)
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