Verizon Buys Out Vodafone To Acquire Wireless Company
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STEVE INSKEEP, HOST:
NPR News business news starts with Verizon in total control.
At least for the wireless network. Yesterday, we told you Verizon was on the way to approving one of the biggest deals in the history of the telecommunications business. And now we can tell you the deal is sealed. The company will pay $130 billion in cash and stock to the British company Vodafone to acquire Vodafone's share of their joint wireless venture.
NPR's Jim Zarroli reports.
JIM ZARROLI, BYLINE: Despite its name, 45 percent of Verizon Wireless is owned by Vodafone. Over the years, Verizon has often tried to buy out its partner, but the two companies weren't able to agree on a price. Now with interest rates rising, borrowing costs are getting higher and the companies were under new pressure to reach a deal. The deal will provide Verizon with a rich source of additional cash flow.
Wireless is one of the most profitable parts of the telecommunications business and Verizon Wireless, with 100 million customers, is one of the most profitable companies. It's also growing fast. The deal means Verizon will no longer have to share those profits with Vodafone.
Meanwhile, the deal will give Vodafone additional capital to expand its presence in Europe and in emerging markets. The deal is unlikely to have much impact on the customers of Verizon Wireless. Verizon already owned most of the venture and controlled its day-to-day operations.
Jim Zarroli, NPR News, New York. Transcript provided by NPR, Copyright NPR.