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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.

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