Vodafone confident tax won’t halt $100bn Verizon deal

Oliver Smith
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VODAFONE is confident tax issues will not stand in the way of any multi-billion dollar deal it agrees with Verizon to offload its shareholding in its US counterpart.

Earlier this year there had been suggestions that a massive tax bill, perhaps as high as $40bn (£25.8bn), could prevent a deal between the two mobile telecoms giants from going ahead.

But yesterday, as Vodafone admitted for the first time it was in talks with Verizon over a deal that could be worth as much as $130bn, those close to the deal played down any tax issues.

“They’ve had years to work on this and you can be sure that there will be a very efficient tax structure in place,” said one source.

Yesterday Vodafone responded for the first time to press speculation over a Verizon deal, after reports in the US claimed talks between the two companies had resumed.

“Vodafone notes the recent press speculation and confirms that it is in discussions with Verizon Communications regarding the possible disposal of Vodafone’s US group whose principal asset is its 45 per cent interest in Verizon Wireless,” the statement said.

“There is no certainty that an agreement will be reached,” it added.

Vodafone, whose US partnership with Verizon dates back to 1999 with its purchase of Airtouch Communications, holds a 45 per cent stake in the joint Verizon Wireless venture.

Resolving Vodafone’s stake in Verizon’s business has remained an issue for years, with reports of the two coming close to a deal in 2004, 2009 and in April earlier this year.

Vodafone chief Vittorio Colao said in May that he would not bow to pressure over a deal and would stake his reputation on selling the stake.