In what may eventually prove to have been the least secret M&A dance of the decade, Verizon and Vodafone are supposedly ready to make a deal, at long last. According to the Wall Street Journal, Verizon will be meeting Vodafone’s price of $130B for the 45% of Verizon Wireless the latter holds.
The deal, which could be announced this morning if the boards approve in time, will be made up of roughly half cash and half Verizon stock. There will probably also be some other details at the margins, but basically the details are as the financial press has been suggesting they would be for months now.
In fact, we’ve been talking about this one for so long there’s little new to say here, not about the deal itself nor about what comes next. Will Vodafone go on a shopping spree with its newfound cash hoarde? Or will AT&T swoop in and buy them out first? It’s too early yet to go further down that speculative path than we already have.
That being said, I wonder if Verizon’s more than $60B debt/bond sale to make it happen will suck up all the oxygen for a while, and therefore effectively close the credit market window that’s been open this summer.
Another thread wandering around my mind this Labor Day morning is that this is probably one of those rare M&A events in which nobody gets hurt. Verizon Wireless will go on in the near term as it has been going on, no need for major layoffs nor any integration snafus to worry about. Customers don’t care that Vodafone will be gone, in fact few probably knew they were there in the first place. The banks get the big fees they’re always chasing, European investors will get some sort of nice cash dividend to play with.
And Verizon? Well Verizon finally gets to emulate Daffy Duck the way they’ve always wanted to and declare Verizon Wireless is ‘mine mine all mine’:
If you haven't already, please take our Reader Survey! Just 3 questions to help us better understand who is reading Telecom Ramblings so we can serve you better!Categories: Mergers and Acquisitions · Wireless