Verizon Smacks Down Talk of Joint Vodafone Buyout with AT&T

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Verizon hasn’t been shy about acknowledging that it’s interested in buying from Vodafone the roughly half of Verizon Wireless that it doesn’t own, but says in no way is it pursuing a purchase of Vodafone itself.

The telecommunications giant shot down a report in the Financial Times Tuesday that cited “usually reliable people” who claimed Verizon and archrival AT&T were joining forces in a $245 billion bid to buy Vodafone, Europe’s largest service provider and the second biggest in the world.

It sounded like a day-late April Fools’ joke. But Verizon wasn’t laughing.

“As Verizon has said many times, it would be a willing purchaser of the 45 percent stake that Vodafone holds in Verizon Wireless,” Verizon stated. “It does not, however, currently have any intention to merge with or make an offer for Vodafone, whether alone or in conjunction with others.”

The FT report said Verizon would get 45 percent of Vodafone its U.S. operations and AT&T would get the 55 percent that lies outside the U.S. A report earlier this year said AT&T was looking at its M&A options in Europe.

Before Verizon shot it down, Yankee Group senior analyst Rich Karpinski was warming up to the idea.

When looked at as two distinct transactions, however, the mega-deal estimated to be the largest M&A deal ever begins to make sense,” Karpinski noted. Verizon has long wanted to have complete control of itself, but peeling off that large investment from Vodafones overall portfolio is problematic for the U.K.-based operator. Getting a premium for ALL of its operations gives Vodafone management a great exit strategy. But the proposed deal is most intriguing from AT&Ts perspective. Rumors that AT&T was sniffing around in Europe for investment opportunities first appeared a few months ago. It goes to AT&Ts ambition: essentially sharing the bulk of the U.S. mobile market with Verizon is one thing; expanding to become a true global player is quite another.”

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