Verizon Communications attempts to acquire full control over Verizon Wireless may have moved closer to reality as Vodafone Chairman Gerard Kleisterlee told investors that the telecom giant would be open to a potential sale of its 45% stake in the U.S. wireless carrier.
“If we see proposals that generate more value for shareholders we will consider them,” Kleisterlee told investors during a conference call, according to Reuters. “There is ongoing communication (that involves) the full board. Both executives and non-executives are involved in those negotiations with Verizon.”
Verizon has reportedly been in talks regarding purchasing Vodafone’s stake in Verizon Wireless for several years, with recent reports suggesting a purchase price of between $100 billion and $120 billion. A purchase would give Verizon full control over its domestic wireless business, which has been the financial driver for its telecom operations.
The move would also put Verizon on more equal footing with domestic rival AT&T, which has full control over AT&T Mobility. While AT&T Mobility has recently not been able to match Verizon Wireless’ financial strength, AT&T is able to glean the full financial benefits from its wireless operations. Verizon Wireless posted $6.4 billion in operating income for the first quarter of this year while AT&T Mobility reported $4.6 billion in net income for the first quarter.
Verizon’s management for its part has been quiet on the possibility of buying out Vodafone’s stake in Verizon Wireless, which it received following the formation of Verizon Wireless in 2000, but has said it would be interested in gaining full control of the operations. Analysts reported that at a meeting with Verizon executives earlier this year, CEO Lowell McAdam said that buying out Vodafone’s stake in Verizon Wireless is the “No. 1” move the company could make to increase shareholder value.
The value of Verizon Wireless can be seen in the $25.5 billion in dividends the operations have paid out over the past two years.
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