iNVEZZ.com, Wednesday, December 11: Vodafone Group
(LON:VOD) expects to complete the $130 billion sale of its 45 percent stake in the United States’ largest mobile operator, Verizon Wireless, to joint venture partner Verizon Communications (NYSE:VZ) on or about February 21, the UK telecoms giant said after the market closed yesterday.
The company released an expected timetable for completing the mega-deal showing that shareholders are to receive the cash proceeds from the sale on March 4. Vodafone has pledged to return some $84 billion, or about 71 percent of the net proceeds of the deal, to shareholders in the form of special dividend and to use the rest to cut debt and finance its growth plans.
Shareholders of Vodafone and Verizon are scheduled to vote on the deal and the special dividend on January 28.
The transaction was announced in September and approved last week by the US Federal Communications Commission (FCC) (FCC approves sale of Vodafone’s stake in Verizon Wireless). The deal clocks in as the third largest corporate acquisition of all time, behind Vodafone's $183 billion acquisition of Mannesmann AG in 1999 and AOL's $164 billion deal for Time Warner the following year. Verizon will pay $58.9 billion in cash and $60.2 billion in stock for Vodafone's 45 percent interest.
Indian deal delayed
Meanwhile, Reuters reports government sources as saying that India’s Foreign Investment Promotion Board (FIPB) has deferred a decision on Vodafone’s proposal to buy out its Indian unit as the company has yet to receive security approvals from the Interior Ministry. The UK operator proposes paying ₤1.01 billion to increase its stake in Vodafone India from 64.38 percent to 100 percent (Vodafone to buy out its India partners Analjit Singh, Piramal Enterprises).
The Department of Telecommunications has given the transaction a green light but has drawn attention to a difference in valuation between the 10.97 percent stake of Piramal Enteprises and the 24.65 percent stake of Analjit Singh. The difference has been attributed to holding company discounts and outstanding debt related to the deal with Analjit Singh.
Vodafone’s share price had risen 0.61 percent to 232.10p as of 13:09 UTC, ahead of the 0.43 percent gain in the FTSE 100 blue chip index to that point.
As of 13:10 UTC buy Vodafone shares at 232.15p.
As of 13:10 UTC sell Vodafone shares at 232.10p.
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