Vodafone late on Sunday (September 1) said it was in advanced talks with Verizon to sell its 45 percent stake in the Verizon Wireless joint venture for cash and common shares in what would be the world's third-largest deal of all time.
People familiar with the situation said they expected a full announcement after the London stock market closes on Monday (September 2), and after the board of Verizon meets to vote on the proposed transaction for the biggest mobile operator in the United States.
The move to sell Verizon closes a heady expansionist chapter for Vodafone, one of Britain's best-known companies, which grew rapidly over the last 20 years through a spate of aggressive deals, taking its brand into more than 30 countries across Europe, Africa and India.
The world's largest deal, a $203 billion hostile take-over of Germany's Mannesmann in 2000, made Vodafone the company it is today.
The new Vodafone will be smaller, less profitable and more reliant on its core, mature European assets but it is expected to use the windfall to rebuild via smaller acquisitions and higher network investments.
Speculation has already begun that the 31-year-old company could itself become a bid target, and news of the pending deal sent its shares up 4 percent to a more than 12-year high in London trade on Monday.
Under the terms of the proposed agreement, Vodafone would get $60 billion (£38.6 billion) in cash, $60 billion in Verizon stock, and an additional $10 billion from smaller transactions that will take the total deal value to $130 billion, two of the people familiar with the matter have told said.
BGC Partners market strategist Michael Ingram says Vodafone shareholders want a big slice of the cake, with caution:
"Shareholders are banging on the doors, they want a very large slice of that cash pile, probably at least 50% of it. On the other hand, if they shrink the company too much it itself becomes a target for acquisition, there was some talk late last week of AT&T sniffing around a smaller Vodafone. On the other hand you know they don't want to blow it all on some ridiculous acquisition. There was some talk that they were looking to expand their triple and quad play offer, there was obviously the Kabel Deutschland acquisition in July, maybe even looking at Liberty Global what was chatter. This could start a whole merry-go-round of M&A across Europe and the U.S."
Presented by Adam Justice