Verizon and Vodafone’s $130 billion buyout was settled over breakfast

September 3, 2013

Verizon has agreed to buy up Vodafone's 45 percent stake in its wireless business, giving Verizon complete ownership over its cellular company and marking the third-largest such deal in U.S. history.

Assuming the $130 billion agreement passes muster with regulators and shareholders, Verizon will soon be able to claim all of the profits gleaned from its wireless division, and Vodafone will receive a windfall to use toward Project Spring, a massive, three-year, multinational network investment project.

Under the terms of the agreement, Verizon will pay $58.9 billion in cash, $60.2 billion in stock and $5 billion in notes. Verizon also raised a whopping $61 billion in financing, the company said.

High-level talks surrounding the merger resembled the proceedings in a spy novel: Verizon's CEO, Lowell McAdams, and Vodafone's top executive, Vittorio Colao, met in San Francisco's Four Seasons hotel and settled on the $130 billion figure over breakfast and a trip to the gym, according to Reuters. The night before, Colao had flown in from Australia so the two could talk face-to-face. The proposed sale even had a code name: River. Verizon was known as "Hudson," while Vodafone was referred to as "Thames."

According to Forbes, only two other mergers/acquisition deals eclipse this one, which is expected to close early next year. In 2000, Vodafone bought the German company Mannesmann for $202 billion, and in 2001 Time Warner sealed its infamous deal with AOL for more than $180 billion.

The Verizon-Vodafone deal ends a 14-year partnership in the United States, where competition in the wireless industry is growing. Sprint, the nation's third-largest wireless carrier, recently concluded a controversial deal with Japan's Softbank for (just) $21.6 billion, and plans for a wireless spectrum auction next year have already divided the nation's other cellular companies.

Brian Fung covers technology for The Washington Post, focusing on telecom, broadband and digital politics. Before joining the Post, he was the technology correspondent for National Journal and an associate editor at the Atlantic.
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