Verizon Wireless remains the gift that keeps on giving, or at least to its parent companies.
The wireless carrier is set to pay out $7 billion in dividends to its parent companies Verizon Communications and Vodafone Group on June 25, with Verizon garnering a total of $3.85 billion for its 55% stake and Vodafone $3.15 billion for its 45% share in the carrier. The move is the third dividend payment made by Verizon Wireless since 2012, which including the latest payment will have totaled $25.5 billion.
The payment, while a welcome relief for both Verizon and Vodafone, could complicate Verizon’s current quest to buyout Vodafone’s remaining stake in Verizon Wireless. Verizon has repeatedly said it would be interested in gaining full control of its domestic wireless operations, but so far Vodafone has not wanted to relinquish that revenue driver. Verizon Wireless posted $6.4 billion in operating income for the first quarter of this year, and just under $22 billion in operating income for all of 2012.
Verizon management hinted earlier this month that Verizon Wireless may forgo another dividend payment in favor of paying down its own debt. Verizon has reportedly been lining up an offer to pay Vodafone $100 billion for its stake in Verizon Wireless, though Vodafone stakeholders are looking for a substantially larger payment.
Vodafone gained its stake in Verizon Wireless through the formation of the wireless operator in 2000 following the merger that combined wireless operations from Bell Atlantic, PrimeCo Personal Communications and Vodafone AirTouch.
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