Vodafone and Verizon now in 'advanced' talks
Vodafone confirms it is close to selling its 45 per cent stake in Verizon for £84bn
TALKS over Vodafone's sale of its 45 per cent stake in Verizon Wireless have now reached an "advanced" stage. The company confirmed the deal with Verizon Communications, expected to be finalised today, would be worth $130bn (£84bn).
Controversially, the BBC reports that no UK tax is expected to be paid on the vast transaction. The deal involves the sale of a stake in a US group and, as the holding company for this is in the Netherlands, the UK taxman would not be entitled to any portion of the sale.
For over a decade Vodafone and Verizon Communications have been in a stand-off over the buyout of the other's stake in Verizon Wireless.
Richard Dunbar, investment director at Scottish Widows, said the sale of Vodafone's stake has been “worth the wait” as Verizon is now in excellent financial shape.
“Previously it [Verizon Wireless] wasn't generating a lot of cash and it wasn't paying dividends to the parent company and the relationship between the managers was a poor one,” Dunbar said. "Recently it has been better - and the business has been performing better."
Verizon Wireless is now the most profitable phone operator in the US, with 100 million customers.
At least half of the proceeds of the deal will be returned to Vodafone shareholders, meaning UK investors will receive tens of billions of pounds, a huge cash injection into the British economy. ·