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New York, NY -- (SBWIRE) -- 09/02/2013 -- Vodafone Group Plc (ADR) (NASDAQ:VOD) would get $58.9 billion in cash, $60.2 billion in Verizon stock, and an additional $11 billion from smaller transactions in a deal that is due to close in the first quarter of next year.
The British group will return 71 percent of the net proceeds to shareholders, including all of the stock, in a sign that it does not expect to go on a new acquisition spree across its remaining core European and emerging markets.
The move to sell out of the joint venture 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 deal is also likely to be the defining event in the careers of Vittorio Colao and Lowell McAdam, the chief executives of Vodafone and Verizon, who rebuilt relations between the two sides, which had long argued over issues including the level of dividends to be paid from Verizon Wireless.
The deal will become the third largest announced deal in the world after Vodafone's $203 billion takeover of Germany's Mannesmann in 1999 and AOL's $181 billion acquisition of Time Warner the following year.
The deal will give Verizon full access to the wireless unit's cash, handing it fresh firepower to invest in superfast mobile networks and fend off challengers in a U.S. market expected to grow more competitive in the coming years.
Verizon said it expected the transaction to be immediately accretive to earnings per share by about 10 percent, excluding any one-time adjustments.
While Vodafone will lose its best asset, it will get a war chest that it can use to reward shareholders and bolster its European operations, which are under pressure from recession and tough regulation.
The British firm said it planned to launch a new investment phase dubbed Project Spring to improve its mobile and broadband networks over the next three financial years.
After returning $84 billion of the sale proceeds to its shareholders, Vodafone will be left with a $30 billion cash pile. Some $10 billion will go to the Project Spring network investment program and the rest will be used to pay down debt, bringing down leverage to one times forward operating profit
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