Following confirmation last week that the two companies were in discussions, Vodafone and Verizon finalised terms of the agreement over the weekend, and a conclusive decision could emerge as soon as today.
The agreement would see Verizon take full ownership of its mobile arm and confirm Vodafone’s exit from the US market.
“Vodafone looks set to successfully emerge from this strategic cocoon with a $130 billion butterfly,” said Victor Basta, managing director of Magister Advisors.
However, Basta warned that Vodafone will face challenges as it continues on its journey from operator to service provider.
“Vodafone's DNA, and indeed where it has created most value, has been in its role as a savvy operator across markets. This creates a risk that Vodafone will become the largest 'digital drug mule' in the world – carrying other vendors' valuable content for a fraction of the upside. Vodafone must evolve – and quickly,” Basta said.
Verizon will pay for half of the purchase with its own stock, according to people familiar with the matter, and will fund the remaining half through loans and bank bonds from JPMorgan Chase & Co, Morgan Stanley, Barclays Plc and Bank of America Merrill Lynch.
UBS and Goldman Sachs are said to be advising Vodafone on the deal.
Last Friday, AT&T was reported to be looking to buy out Vodafone’s remaining assets.
