The two companies had been partners for about 14 years, and the deal is the third largest transaction ever inked in corporate history. Vodafone has also raised $60 billion to finance the deal, in one of the largest financing packages ever. Vodafone’s $203 billion takeover of Mannesmann in 1999 takes the number one place, with the second-largest deal ever distinction going to the $181 billion AOL-Time Warner merger.
The transaction was unanimously approved by the boards of directors of Verizon and Vodafone, and is expected to close in the first quarter of 2014, subject to customary closing conditions.
Lowell McAdam (Chairman and CEO, Verizon): The capabilities to wirelessly stream video and broadband in 4G LTE complement our other assets in fiber, global IP and cloud. These assets position us for the rapidly increasing customer demand for video, machine to machine and big data. We are confident of further growth in wireless, and our business in its entirety. We believe full ownership will provide increased opportunities in the enterprise and consumer wireline markets.
Verizon will pay Vodafone $58.9 billion in cash, and has entered into a fully executed $61.0 billion Bridge Credit Agreement with J.P. Morgan Chase Bank, Morgan Stanley Senior Funding, Bank of America, and Barclays.
Verizon will also issue common stock currently valued at approximately $60.2 billion to be distributed to Vodafone shareholders, subject to a collar arrangement with a floor price of $47 and a cap price of $51. In addition, Verizon will issue $5 billion in notes payable to Vodafone.
Guggenheim Securities, J.P. Morgan Securities, Morgan Stanley, and Paul J. Taubman served as lead financial advisors to Verizon. J.P. Morgan Securities and Morgan Stanley also rendered fairness opinions in connection with the transaction. Barclays and BofA Merrill Lynch served as financial advisors to Verizon. Wachtell, Lipton, Rosen & Katz and Macfarlanes are serving as transaction counsel to Verizon, and Debevoise & Plimpton is advising Verizon on its debt financing.
Goldman Sachs and UBS advised Vodafone. Citigroup is acting as corporate broker.
You can find the statement issued by Verizon on the transaction here.
You can find the statement issued by Vodafone on the transaction here.
[Image courtesy: Verizon]
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