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Verizon Schedules Jan. 28 Vote on Vodafone Wireless Deal

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Verizon Communications
Verizon Communications Inc. announced the deal to buy out Vodafone Group Plc’s 45 percent stake in their joint venture in September. Photographer: Jin Lee/Bloomberg

Dec. 7 (Bloomberg) -- Verizon Communications Inc. scheduled a shareholder meeting for Jan. 28 to vote on its $130 billion acquisition of Vodafone Group Plc’s stake in their wireless joint venture.

The company will ask investors to approve the issuance of as many as 1.28 billion shares to complete the transaction, Verizon said yesterday in a filing. It has said it expects to close the deal by the first quarter of next year.

The New York-based company is seeking full control of the unit on a bet that U.S. consumers’ increasing use of smartphones and tablet computers will fuel greater demand for wireless data services. The transaction will wind down a 14-year partnership with Vodafone to operate the largest and most profitable mobile-phone carrier in the U.S.

Verizon announced the deal to buy out Vodafone’s 45 percent stake in the joint venture in September. To help fund the purchase, Verizon sold $49 billion in bonds -- the biggest company debt offering ever.

By owning 100 percent of Verizon Wireless, the parent company will keep all of the earnings and get more leeway to upgrade its mobile network. Newbury, England-based Vodafone has said it will use part of the proceeds from the merger to invest in its own network.

Verizon rose 1.2 percent yesterday to $49.48 in New York. The shares are up 14 percent this year. Vodafone gained 2.1 percent to 230.85 pence in London and has soared 49 percent this year.

Credit Rating

Verizon will focus on boosting its credit rating after the merger closes next year, Chief Financial Officer Fran Shammo said last month at an industry conference.

The company plans to return to its A- credit rating in the next four or five years after completing the biggest takeover in more than a decade, Shammo said. Standard & Poor’s currently rates Verizon BBB+, one level below A-.

Verizon also plans to add capacity to its fourth-generation wireless network in areas such as New York, where parts of the infrastructure have been overwhelmed.

“We need to de-lever as quickly as possible,” Shammo said last month at a Barcelona conference. “We are going to continue to invest in our network and our platforms. We’re going to continue to acquire spectrum, which we need to deliver our wireless performance.”

To contact the reporter on this story: Crayton Harrison in New York at tharrison5@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net

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