Verizon shareholders approve takeover of mobile unit
- 28 January, 2014 18:50
Verizon Communications shareholders pushed forward the full buyout of Verizon Wireless on Tuesday, voting to approve the issuance of stock to Vodafone Group shareholders.
A "substantial majority" of Verizon shareholders voted in favor of issuing as many as 1.28 billion Verizon shares as part of a planned US$130 billion takeover of the company's mobile subsidiary, according to a press release. Verizon Wireless is a joint venture between Verizon and U.K.-based Vodafone, but both partners have been seeking for years to change that. They announced a deal last September for Verizon to use both cash and stock to buy Vodafone's 45 percent stake.
Also on Tuesday, at a meeting in London, Vodafone shareholders approved other matters necessary for the transaction to close, Verizon said. The deal still needs approval from the High Court of Justice of England and Wales and must meet other closing conditions. It is expected to close around Feb. 21.
By owning both its wired and wireless businesses outright, Verizon hopes to have more financial flexibility to invest in new technologies and offer more tightly integrated services. The carrier's chief rival, AT&T, is both a wireline and mobile operator.
Analysts believe Vodafone may use the proceeds from the sale to buy more companies in Europe, including wireline carriers. But the company might become a takeover candidate itself if rumors of an offer by AT&T materialize. On Monday, in response to a query from U.K. regulators, AT&T said it doesn't intend to bid for Vodafone in the next six months. But if another company tries to buy Vodafone, AT&T could jump in immediately.