Verizon Throws Cold Water on Vodafone Rumors, Again

April 3rd, 2013 by · Leave a Comment

After rumors yesterday that a Vodafone deal was in the works, Verizon quickly moved to put out the flames. If that sounds familiar it’s because it is. Whether it’s just for the Verizon Wireless stake, the whole shebang, or a three-way, such rumors have been difficult to stop lately.

Verizon issued a denial yesterday saying that while the company is still interested in buying the 45% of Verizon Wireless that it doesn’t yet own, “It does not, however, currently have any intention to merge with or make an offer for Vodafone, whether alone or in conjunction with others.”

The rumors are so hard to kill because everyone feels like the stars have aligned enough that a deal is viable. And when Verizon or Vodafone denies there is fire under all the smoke, nobody listens because that’s exactly what they would say regardless of reality.

The posited three-way deal that hit the airwaves yesterday was probably the least likely of the potential outcomes here, but not because it doesn’t make sense as an end result. Three way deals are tougher because the more people you have that could say no, the more likely one of them will do exactly that.

But on paper, this one works well enough to hibernate rather simply die. It will live on in pockets on the theory that there are too many details to work out, so even if they’re working on it we’re talking about the second half before they even reach the point of having a real deal on the table.  Heck, maybe this will even give Verizon’s team a few ideas.

So while Verizon’s blast of cold water may cool things off for a few weeks, I’ll bet we hear from this one again in a month or two. But not yet, May’s rumor will take a different angle.

But wait, how about a thought exercise. If not AT&T, then who else might Verizon team with. If you quickly went through a mental list of possibilities like I did, first you crossed off all the European carriers as financially too conservative at present — with perhaps a second look at Teliasonera.  Then you crossed off the Asian carriers as just too far out there, and you realized you had forgotten to add Carlos Slim and América Móvil to the list.  Hmm…..

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Categories: Mergers and Acquisitions · Wireless

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