Vodafone, Verizon Shareholders Approve Verizon Wireless Stake Deal

(RTTNews) - Shareholders of British telecom giant Vodafone Group Plc.'s (VOD, VOD.L) on Tuesday nearly unanimously approved the buyout of its 45 percent stake in the Verizon Wireless joint venture by Telecommunications giant Verizon Communications, Inc. (VZ). The deal, which was backed by 99.76% of Vodafone shareholders, is now expected to close by February 21.

Meanwhile, shareholders of Verizon Communications also at a special meeting approved the company's issuance of up to 1.28 billion shares of common stock to Vodafone shareholders to complete the deal.

"Acquiring Vodafone's stake in Verizon Wireless will provide Verizon with greater financial flexibility to invest in new technologies and address evolving customer demands. This is critical because we believe that, when it comes to wireless growth, we are just getting started," Verizon chairman and CEO Lowell McAdam said in a statement.

Verizon Communications had struck a deal in early September with Vodafone to acquire the stake in a $130 billion deal, including $58.9 billion in cash, $60.2 billion in Verizon stock, and the remaining $10.9 billion from smaller deals. The deal will see Verizon Communications gain 100 percent control of Verizon Wireless.

The deal now remains subject to approval of the High Court of Justice of England and Wales as well as other customary closing conditions. Verizon has already received the required approvals from the Federal Communications Commission for the acquisition on December 4, 2013.

Vodafone will return 71 percent or $84 billion of the net proceeds of $130 billion to its shareholders, with more than two-thirds in the form of stock. It is billed as the largest ever single return of value to shareholders in corporate history.

The $130 billion deal, which ends a 14-year partnership and marks Vodafone's exit from the U.S. mobile market, would be the second biggest all-time corporate deal, behind Vodafone's $172 billion acquisition of Mannesmann AG in 1999.

Verizon Wireless, the largest U.S. cellphone carrier, is the US wireless joint venture between Verizon Communications and Vodafone, with Verizon owning a 55 percent stake and Vodafone owning a 45 percent interest. The joint venture began operations as Verizon Wireless on April 4, 2000.

Verizon had been contemplating the buyout of the stake several times in the past decade, but pricing has been the biggest stumbling block along with the risk of raking up a huge tax bill nearing $10 billion.

For Verizon, the deal will mean that it no longer has to share the billions in cash generated by Verizon Wireless, the largest and most profitable U.S. mobile phone carrier.

Meanwhile, with Vodafone selling off one of its largest divisions, speculation has mounted that the British mobile carrier could itself become a bid target.

VZ closed Tuesday's regular trading session at $47.36, down $0.33 or 0.69% on a volume of 16.36 million shares, while VOD closed at $37.17, up $0.37 or 1.01% on a volume of 12.03 million shares. VOD also gained a further $1.33 or 3.58% in after-hours trading.

VOD.L closed in London at 223.30 pence, down 0.25 pence or 0.11% on a volume of 100.0 million shares.