Vodafone’s sale of Verizon Wireless stake to raise US$130 billion

Newbury, UK, 2 September 2013 – Vodafone has announced that it has reached agreement to dispose of its US group (whose principal asset is its 45% interest in Verizon Wireless) to its joint venture partner Verizon Communications Inc. for US$130 billion (£84 billion).

The consideration is made up of:

  • US$58.9 billion (£38 billion) in cash
  • US$60.2 billion (£38.9 billion) in Verizon shares
  • US$5.0 billion (£3.2 billion) in the form of Verizon loan notes
  • US$3.5 billion (£2.3 billion) in the form of Verizon’s 23% minority interest in Vodafone Italy
  • US$2.5 billion (£1.6 billion) through the assumption by Verizon of Vodafone net liabilities relating to the US Group.

Vodafone intends to implement a new organic investment programme, Project Spring, to establish further network and service leadership through additional investments of £6 billion over the next three financial years.

At completion, Vodafone shareholders are expected to receive all the Verizon shares and US$23.9 billion of cash totalling US$84 billion (£54.3 billion), equivalent to 112p per share and representing 71% of the net proceeds.

Vodafone expects that strong free cash flow generation will continue to underpin shareholder returns. The board, therefore, intends to increase the total 2014 financial year dividend per share by 8% to 11p, and intends to grow it annually.

Subject to the satisfaction of certain conditions, the transactions are expected to complete in the first quarter of 2014.

Vodafone Group Chairman Gerard Kleisterlee said: “Our sustained investment in Verizon Wireless has created a great deal of value for shareholders from a market leader with great momentum. Verizon’s offer now provides us with an opportunity to realise this value at an attractive price. The transaction will position Vodafone strongly to pursue our leadership strategy in mobile and unified communication services for consumers and enterprises both in our developed markets and across our emerging markets businesses. It will also enable us to provide substantial returns to individual shareholders and to the investment funds relied upon by savers and pensioners”.

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