Vodafone has sold its 45% stake in Verizon Wireless to Verizon Communications group in one of the biggest deals in corporate history.
The $130 billion deal was announced by Vodafone after the close of trading on the London Stock Exchange.
The company will return $84 billion to its shareholders, of which $34 billion will go to shareholders in the UK.
Vodafone will also invest money in its business, with funds earmarked for high speed mobile phone networks.
It said that by 2017 its main five European markets would have almost complete 4G coverage.
Vodafone group chairman Gerard Kleisterlee said: “The transaction will position Vodafone strongly to pursue our leadership strategy in mobile and unified communication services for consumers and enterprises, both in our developed markets and across our emerging markets businesses.”
Vodafone has sold its 45 percent stake in Verizon Wireless to Verizon Communications group in one of the biggest deals in corporate history
The company is also launching a $9 billion investment plan called Project Spring, which will accelerate the introduction of 4G networks and increase investment in laying fibre optic cables, among other things.
The investments would allow the company to offer much faster broadband services to customers.
Project Spring will also add to Vodafone’s high street stores and develop mobile payment services.
Vodafone group chief executive Vittorio Colao said: “Project Spring will strengthen and accelerate our existing Vodafone 2015 strategy, enabling us to take even greater advantage of the growing global demand for ubiquitous high-speed data.”
It is the third biggest corporate transaction, behind Vodafone’s 1999 deal to buy Germany’s Mannesmann and AOL’s purchase of Time Warner in 2000.
Despite the huge size of the deal, it will not generate tax revenue for the UK.
Vodafone says that as the US business is owned by a Dutch holding company, it will not be liable for tax.
However, it will pay $5 billion in tax in the United States.
Vodafone shares rose 3.4% during the day.
The deal ends a long-running saga, with both Vodafone and Verizon trying to take full control of Verizon Wireless over the years, but having been unable to agree a price.
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Vodafone has confirmed it is in talks with Verizon Communications over the sale of its 45% stake in their joint venture, Verizon Wireless.
Reports earlier this year suggested that Verizon was looking to buy Vodafone’s stake in Verizon Wireless for about $100 billion.
However, there has also been speculation that the stake is worth more than this.
Shares in Vodafone jumped 8% following the company’s announcement.
Vodafone is in talks with Verizon Communications over the sale of its 45 percent stake in Verizon Wireless
Vodafone said in a statement: “Vodafone notes the recent press speculation and confirms that it is in discussions with Verizon Communications Inc. regarding the possible disposal of Vodafone’s US group whose principal asset is its 45% interest in Verizon Wireless.
“There is no certainty that an agreement will be reached.”
Verizon Wireless is the largest and most profitable phone operator in the US, with 100 million customers.
The deal would be one of the largest corporate transactions of all time if it goes through, and would provide a large cash injection for the UK telecoms company, but would leave Vodafone without a highly profitable non-European partnership.
Verizon has been looking to buy out Vodafone’s stake in Verizon Wireless for some years, however, price has been a consistent hurdle.
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Verizon Wireless apologized yesterday for sending out a mass text message to thousands of people warning of a “civil emergency” and an “extreme threat to life”.
Verizon text urging people to “take shelter before 1:24 p.m.” was sent out at 12:26 p.m. on Monday to cell phone users in the New Jersey counties of Middlesex, Monmouth, Morris and Ocean.
It led to scores of worried residents calling their local police departments, NJ.com reports.
Many people were panic stricken and in a state of shock and confusion.
Verizon text urging people to “take shelter before 1:24 p.m.” was sent out at 12:26 p.m. on Monday to cell phone users in the New Jersey counties of Middlesex, Monmouth, Morris and Ocean
About two hours after the mass text was sent out, Verizon issued an apology, saying that it was a “test emergency notification” that failed to say it was a test.
Company spokesman David Samberg said: “This test message was not clearly identified as a test.
“We apologize for any inconvenience or concern this message may have caused.”
Police departments and county authorities confirmed that they received a high volume of 911 calls from concerned residents asking whether there was an actual emergency.
Before Verizon came forward to issue the apology, authorities thought it may have been the work of hackers.
Monmouth County Sheriff Shaun Golden said: “There is no reason to panic here. It is a false text done maliciously.”
It also prompted the New Jersey Office of Homeland Security to issue a special statement on Twitter this afternoon reassuring citizens there was no actual emergency.
