Vodafone's sale of ownership of joint venture to Verizon

Finance & Accounting
Pages 13 (3263 words)
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Vodafone’s sale of ownership of joint venture to Verizon Table of Contents Introduction 3 Rationale behind JV for both Companies 5 Analysis of Stock returns 7 Impact of Stake Sell on Verizon’s Stock returns 7 Impact of Stake Sell on Vodafone Stock returns 10 Arrangements for Limiting UK Tax Implications 12 Discussion of Financing of Sale 13 Various Investment Options available to Vodafone 14 Conclusion 15 References 17 Bibliography 19 Introduction One of the world’s largest mobile phone companies, Vodafone Group Plc confirmed that it was interested to dilute ownership capital and it was in discussion with Verizon Communications for selling its operations in United States.


It is expected that if the deal goes through successfully then it will be one of the biggest in the history of Merger and Acquisition (Financial Times, 2013). History of Joint Venture In 2004, Vodafone was close to sell their shares to Verizon Wireless but their initiative did not materialize then primarily due to Vodafone’s failure to bid for AT&T Wireless. The Chief Executive officer of Vodafone at that time, Arun Sarin, stated that both Verizon and Vodafone were interested in bigger stakes in their joint venture and both were unwilling to forego majority ownership (Yahoo, 2013). Vodafone entered the United States market in the year 1999 through a series of deals that ultimately resulted in the formation of Verizon Wireless in the year 2000, with Verizon Communications holding majority 55% stake and Vodafone the rest. ...
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