Verizon Communications and Vodafone have reached a $130 billion agreement to sell Vodafone’s 45% stake in Verizon Wireless back to the telco. The deal — the third largest corporate acquisition in history — will end Vodafone’s presence in the American market.
Verizon Wireless was founded as a joint venture between Vodafone and Verizon in 2000, though Vodafone has been a silent partner for the most part as Verizon retained operational support of the cellco, the No 1 wireless carrier in the United States. Vodafone is now flush with money to continue its acquisition spree in European broadband markets (a tie-up with Liberty Media in Germany as a rumored next step for the phone giant), while Verizon will now have more operating cash with which to step up network expansion efforts and build out new initiatives, like ancillary broadband and Wi-Fi packages. It will also be able to streamline its wireless operations into its telco processes to bump up margins.
Verizon and Vodafone voted on the deal this weekend, with the approval announcement coming on Monday. The transaction is expected to have little effect on Verizon’s 100 million customers in the near term.
With growth in mobile packages slowing down in a saturated market, and with competitors like Japan’s SoftBank entering the market by way of its July acquisition of Sprint, the company and its channel partners/dealers will need to invest to stay ahead of market trends.