UK mobile operator Vodafone has finally admitted it is in talks with Verizon Communications to sell off its portion of the company’s joint venture in the US.
The two companies founded Verizon Wireless in 2000 with Vodafone owning a 45% share. It now boasts the largest 4G coverage amongst its competitors, along with over 100 million customers.
However, the partnership has had some rocky patches in recent years and many shareholders had been putting pressure on Vodafone to sell up.
Despite speculation in the press for many months, both parties remained tight lipped, but today Vodafone broke the silence, releasing a statement admitting the pair were talking about a deal and the price tag on the table.
“Vodafone confirms that it is in advanced discussions with Verizon Communications. regarding the disposal of Vodafone's US group whose principal asset is its 45% interest in Verizon Wireless for $130bn,” it read. “The consideration would substantially comprise a mixture of Verizon common stock and cash.”
However, the company still wouldn’t set it in stone that the deal would go ahead.
“There is no certainty that an agreement will be reached,” the statement continued. “A further announcement will be made as soon as practicable.”
If it does go through though, there is some question as to how much tax will be seen by the UK government, as being a US conglomerate, the deal won’t be subject to capital gains tax.
However, Richard Dunbar, investments director at Scottish Widows, told the Today programme shareholders would still be looking at paying a dividend of 40% to HMRC, adding: “George Osborne will still be smiling this morning when he hears this news.”