Vodafone has sold its Verizon Wireless stakes. The stakes which consist of 45% of the total stakes were sold for $130 billion ((£84bn) to Verizon Communications. Vodafone's deal with the American telecoms group is considered to be among the largest in the history. The deal was officially announced after the trading for the day was closed at the London Stock Exchange.
YouTube/Nick Fletch Vodafone has sold its Verizon Wireless stakes to Verizon Communications.
Vittorio Colao, the Chief Executive of Vodafone, was talking to BBC when he said that they had received such an offer that, they accepted it. The acceptance of the offer was going to benefit the shareholders, he added.
As an obvious consequence of the impending deal, the Monday morning saw Vodafone shares rising 3.5% to reach 231.5p. The deal was apparently approved on Sunday itself when the board members had a meeting to consider the same. Both the companies are likely to publish individual terms of agreement shortly.
The deal also means that the company is going to return £54bn to the shareholders. £22bn of the entire amount will be given to the UK shareholders. Vodafone is all set to make investment in its own business. There seem to be specific plans of investing funds on high speed mobile networks. The company focuses on providing complete 4G coverage to the 5 main markets in Europe by the year 2017. It is called the Project Spring.
Project Spring is also expected to add more value to Vodafone's mobile payment services and high street stores. It will also help the company offer incredibly fast broadband services. According to business analysts, the huge amount of funds is going to let Vodafone invest generously in Europe.
"I think Vodafone has looked at its European market and decided it needs to consolidate its business in a number of countries by buying up broadband and cable TV assets to go with its mobile businesses," said Mark Newman, telecoms analyst at consultancy Informa, as reported in BBC News.
Even though one of the biggest deals in the history is going to help a direct tax windfall in the UK, it is expected to benefit the British economy in more ways than one as Vodafone plans to invest most of the amount in Europe itself.