Verizon, Vodafone reportedly close to $130 billion deal
Verizon and Vodafone are close to a deal that will see the U.S.-based carrier buy out the U.K. company's stake in Verizon Wireless for US$130 billion, according to press reports.
Vodafone last week confirmed negotiations for the buy-out of its 45-percent stake, a deal that is not seen as having much impact on Verizon Wireless customers.
Negotiators for both companies have agreed on terms of a cash and stock transaction, but both boards must still approve the deal, the Wall Street Journal reported.
The expectation that interest rates could rise may be driving Verizon to close on the buy-out, which it has been seeking for some time, analysts said last week. Higher interest rates would drive up the cost of financing the deal.
Vodafone is expected to use proceeds of the buyout to shore up its European business.
"What is finally motivating Vodafone is the implementation of their European integrated carrier strategy," Chetan Sharma, founder and president of Chetan Sharma Consulting, told IDG News last week.
(With reporting by Stephen Lawson.)