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.