This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Deal: Verizon Gets Full Control of Wireless Unit in $130 Billion Deal

Stocks in this article: VOD VZ

Adding further detail, Vodafone said Verizon had the right to increase the cash portion of the deal by up to $15 billion and reduce the size of the payment in shares proportionally.

It also explained that the notes included in the Verizon deal would be Verizon senior unsecured floating rate loan notes in two equal tranches with maturities of 8 and 11 years, and that Vodafone had staged sale rights from 2017.

Verizon expects the deal to be immediately accretive to earnings per share by about 10% on closing, without any one-time adjustments. It also declared a quarterly dividend of 53 cents a share, an increase of 2.9% from the previous quarter.

Vodafone's stock had already jumped 8% since Thursday when it confirmed talks for the first time. It gained a further 3.4% on Monday to close at 213.2 pence, giving the company a market capitalization of £103.7 billion ($161.1 billion).

Vodafone said in Monday's statement that its shareholders will garner $84 billion of the proceeds and also announced a plan to invest £6 billion over the next three years "to establish further network and service leadership." These investments will include upgrading and further building its 3G and 4G networks across Europe, as well as faster deployment of mobile data services and a number of other areas of investment.

Also clarifying the much debated question of taxation, Vodafone said the deal would give rise to about $5 billion of tax in the U.S. as a result of a reorganization of its assets before closure which would leave its remaining assets held through a Netherlands company. Exiting those assets would be taxable neither in the U.S. nor the Netherlands. It also claimed that if the assets were held in the U.K. instead of the Netherlands, they would still not be subject to U.K. tax. "Under rules established in 2002, the U.K. has similar shareholding disposal exemptions to those of the Netherlands," Vodafone said.

Vodafone is advised by Karen Cook of Goldman Sachs Group Inc. and Simon Warshaw of UBS (UBS).

Guggenheim Securities LLC, JP Morgan, Morgan Stanley and Paul J. Taubman served as lead financial advisers to Verizon, and JPMorgan and Morgan Stanley also rendered fairness opinions in connection with the transaction. Barclays and Bank of America Merrill Lynch served as financial advisers to Verizon. Wachtell, Lipton, Rosen & Katz and Macfarlanes LLP are serving as transaction counsel to Verizon, and Debevoise & Plimpton LLP is advising Verizon on its debt financing.

2 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs