Vodafone confirms talks with Verizon over US stake sale

Vodafone has confirmed it is in talks with United States company Verizon Communications over the sale of its 45 per cent stake in their joint venture, Verizon Wireless.

Reports earlier this year suggested that Verizon was looking to buy Vodafone’s stake in Verizon Wireless for about $100bn (£64.5bn).

However, there has also been speculation that the stake is worth more than this.

Shares in Vodafone jumped 9 per cent following the company’s announcement.

Vodafone said in a statement, “Vodafone notes the recent press speculation and confirms that it is in discussions with Verizon Communications Inc. regarding the possible disposal of Vodafone’s US group whose principal asset is its 45 per cent interest in Verizon Wireless.

“There is no certainty that an agreement will be reached.”

The British Broadcasting Corporation reported that Verizon Wireless is the largest and most profitable phone operator in the US, with 100m customers.

The deal would be one of the largest corporate transactions of all time if it goes through, and would provide a large cash injection for the United Kingdom telecoms firm, but would leave Vodafone without a highly profitable non-European partnership.

Verizon has been looking to buy out Vodafone’s stake in Verizon Wireless for some years, however, price has been a consistent hurdle.

Another potential problem with a deal, analysts say, is how to arrange it so that Vodafone is not landed with a huge tax bill.

Vodafone’s stake in Verizon Wireless, the US mobile market leaders, has become more important as performance in its key European markets has cooled.

In May, Vodafone revealed a 90 per cent drop in annual net profit after charges relating to poor trading in Italy and Spain.

Profit after tax for the year was £673m compared with £7bn the year before.

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