Vodafone denies plan to buy Verizon
- 17 July, 2007 08:15
Vodafone Group has denied a Monday report by the Financial Times that it was considering buying Verizon Communications in a huge US$160 billion deal.
The paper, citing unnamed sources, said the international mobile operator was contemplating such a deal but hadn't approached Verizon and wouldn't necessarily go ahead with it. But Verizon's shares were up US$1 at US$42.76 in afternoon trading on the New York Stock Exchange.
Vodafone issued a statement to the London Stock Exchange to squelch the report.
"Vodafone notes press speculation that it is considering a possible offer for Verizon Communications. Vodafone wishes to make it clear that it has no plans to make such an offer," the statement said.
Vodafone owns 45 percent of Verizon Wireless, the rest of which is owned by incumbent wireline carrier Verizon Communications. The dual ownership could tie Verizon's hands as it goes up against rival AT&T, which now owns all of its mobile business and is moving toward "quad-play" bundles of broadband, video, wireline voice and mobile services.
The arrangement gives Vodafone a stake in a profitable U.S. mobile business but doesn't allow it to chart its own course in the market. Vodafone tried to acquire AT&T Wireless in 2004 but was outbid by Cingular. The company has expanded aggressively in other countries, including Germany, where it bought Mannesman in 2000.
Buying all of Verizon would create a company valued at about US$300 billion. But as part of the deal, Vodafone might spin off Verizon's wireline business in order to build an all-wireless carrier, the Financial Times said.
Verizon is the second-largest U.S. carrier behind AT&T in both wired and wireless customers. It had 60.7 million wireless subscribers and 7.4 million broadband customers at the end of the first quarter. Its Fios TV fiber-to-the-home service had attracted about 348,000 households. Verizon also operates a global enterprise communications business. Vodafone, based in Newbury, U.K., had 198.6 million customers across Europe, the Middle East, Africa and the Asia-Pacific region at the end of last year.