Back in September of 2013, Verizon agreed to a deal with Vodafone to buy the European company’s 45% indirect interest in the US wireless carrier, valued at $130 billion. In December, the deal was approved by the FCC, with final closing of the deal being announced this morning.
With the closing, Verizon now owns 100% of itself, which provides the company with “greater financial flexibility, enhanced operational efficiency and innovations that will benefit customers.”
Lowell McAdam, Verizon’s chairman and CEO, gave the following statement in a press release.
This is a great day for Verizon. The new Verizon now has full ownership of the U.S. wireless industry leader in network performance, profitability and cash flow. Acquiring Vodafone’s stake in Verizon Wireless provides us with opportunities for greater financial flexibility, enhanced operational efficiency and innovations that will benefit customers. We are confident it will fuel further growth in our business.
As we have stated in the past, Big Red customers won’t see this transaction affect their wireless bills anytime soon. If anything, it’s good to see an American company have complete control of itself in the US. It almost seems like a novelty idea this day and age.
The full press release can be read below.
Verizon Now Owns 100 Percent of the Industry-Leading U.S. Wireless Carrier
NEW YORK – Verizon Communications Inc. (NYSE, Nasdaq: VZ) today announced that it has completed its acquisition of Vodafone Group Plc’s (London, Nasdaq: VOD) 45 percent indirect interest in Verizon Wireless in a transaction valued at approximately $130 billion. As previously announced, the transaction is immediately accretive to Verizon’s earnings per share by approximately 10 percent, excluding any non-operational adjustments.
“This is a great day for Verizon,” said Lowell McAdam, Verizon chairman and CEO. “The new Verizon now has full ownership of the U.S. wireless industry leader in network performance, profitability and cash flow. Acquiring Vodafone’s stake in Verizon Wireless provides us with opportunities for greater financial flexibility, enhanced operational efficiency and innovations that will benefit customers. We are confident it will fuel further growth in our business.”
McAdam continued: “Over the past 14 years, Verizon Wireless has become the largest and most profitable wireless company in the U.S., and this could not have been achieved without the successful partnership between Verizon and Vodafone. We look forward to continuing to provide superior solutions and services to meet our customers’ evolving demands and delivering significant value to our shareholders.”
As previously announced, pursuant to the stock purchase agreement, Verizon issued 1,274,764,121 common shares to shareholders of Vodafone as the stock portion of the consideration for Vodafone’s 45 percent indirect interest in Verizon Wireless. Verizon used proceeds from capital markets transactions occurring in September 2013 and February 2014, as well as $6.6 billion borrowed on Feb. 21, 2014 under its Term Loan Credit Agreement, dated Oct.1, 2013, for the payment of the cash portion of the consideration to Vodafone and related fees and expenses.
Guggenheim Securities LLC, J.P. Morgan Securities LLC, Morgan Stanley & Co.LLC and Paul J. Taubman served as lead financial advisers to Verizon. Barclays and BofA Merrill Lynch served as financial advisers to Verizon. Wachtell, Lipton, Rosen & Katz and Macfarlanes LLP served as transaction counsel to Verizon, and Debevoise & Plimpton LLP advised Verizon on its debt financings.
Founded in 2000 as a joint venture of Verizon and Vodafone, Verizon Wireless reported $81.0 billion in operating revenues in 2013. Operating income margin was 32.1 percent in 2013.
*Investor Webcast Scheduled for Monday*
McAdam will provide further comment during an investor presentation onMonday, Feb. 24, the first full day of trading for the new Verizon. FranShammo, Verizon executive vice president and CFO, will also participate in the webcast, which will begin at 8:30 a.m. Eastern time. Website access instructions, a news release and presentation slides will be available prior to the presentation on Verizon’s Investor Website at www.verizon.com/investor.
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