VODAFONE shares are set to rise this morning on suggestions the telecoms giant is gearing up for an exit of its US joint venture Verizon Wireless (VZW).
Banks in London and New York are believed to be salivating at the prospect of a deal that could be worth more than $100bn (£66bn). Vodafone owns 45 per cent of VZW, with the rest owned by Verizon Communications, its US partner.
Verizon Communications has repeatedly stated its desire to buy Vodafone’s stake and the British firm is understood to be open to a sale, although no decision has been taken.
Other options could include a merger of the two companies, in what would be one of the biggest deals of all time. The success of VZW has sent Verizon Communications’ share price upwards in the last three years, meaning the two companies now have a roughly equal market value. This would make a merger more possible, although the US firm has concerns over Vodafone’s exposure to difficult European markets.
A sale or merger is by no means a certainty, however, and Vodafone is not under pressure to dispose of its most lucrative asset. Any option is understood to be a possibility, with chief executive Vittorio Colao not ideologically wedded to VZW.
The stake has been valued at near to $100bn, but Verizon’s desire to take hold of it could push the cost of the deal above that level.
The two firms did not comment.