Verizon denies intention to merge with or buy Vodafone
Reuters in New York
Verizon Communications said it does not “currently have any intention” to merge with or buy its partner Vodafone Group, either alone or in conjunction with others, in response to press reports.
However, the telephone company said it would still be a willing buyer of Vodafone’s 45 per cent share of their Verizon Wireless US venture, in line with public statements Verizon has made many times over the years.
Verizon’s statement contradicts a report from the Financial Times Alphaville blog on Tuesday that cited unnamed sources saying Verizon and its biggest US rival, AT&T Inc, had been working together on a bid for Vodafone in which Verizon would take Vodafone’s US assets and AT&T would take the rest.
Bernstein analyst Robin Bienenstock said in a research note that any deal “other than a merger is unwelcome by Vodafone’s management” as management believes that the US market is more attractive than Europe for wireless.
While analysts said they saw benefits from a Verizon purchase of the rest of its wireless venture, they were much more sceptical of the idea that AT&T would want Vodafone’s overseas assets in a deal they perceived as as highly risky.
Verizon has said for many years that it would like to buy the rest of Verizon Wireless, the biggest US mobile service, but the companies have never been able to reach an agreement.
Speculation about a potential deal between Verizon and Vodafone has ramped up since January as Vodafone explored what to do with its US asset, which makes up about 75 per cent of its value.
Speculation about a potential deal between Verizon and Vodafone has ramped up since January as Vodafone explored what to do with the US business, considered by many investors its most valuable asset.
The speculation has stemmed partly from a valuation gap between Verizon and Vodafone, seen by some analysts as making a deal this year more likely.
Verizon’s unwillingness to go ahead with a merger may scupper its chances of buying out Vodafone’s Verizon Wireless stake, at least for now, according to some analysts.