Verizon and Vodafone are in discussions about possible $130 billion deal.
According to Bloomberg, the carriers are discussing Vodafone Group possibly selling the 45 percent share it owns in Verizon Wireless to United States partner Verizon Communications in what would be the biggest deal in more than a decade.
"This deal is extremely important for Vodafone for their convergence strategy toward more cable assets because pure mobile operators will certainly experience capacity bottlenecks in the future," Leopold Salcher, an analyst at Raiffeisen Capital Management told Bloomberg.
If Verizon Wireless is bought out by Vodafone, the move would be the latest in a series of mergers and acquisitions in the U.S. cellular phone market that has exceeded Europe with technologies equipped with faster Internet browsing and video streaming for computers and smartphones Bloomberg reported.
The deal would also end a partnership in the last decade that has given billions in dividends to Vodafone, while restricting Verizon from completely owning America's most profitable cell phone company.
Verizon Communications is negotiating with many banks to collect $10 billion from each financial institution to finance about $60 billion of the buyout Bloomberg reported.
The acquisition would also be the biggest deal since Vodafone, a communications provider in London acquired Mannesman AG in 2000. The company's finances would also be helped as its Chief Executive Officer Vittorio Colao attempts to rejuvenate its European businesses hurt by the region's debt issues, and escape deals where Vodafone doesn't have absolute control.
"There's no certainty that an agreement will be reached," Vodafone said in a statement according to Bloomberg.
Verizon spokesman Bob Varettoni did not comment.
In a long saga of Vodafone and Verizon attempting to reach a deal developments began in 1999 when Vodafone outbid Verizon's predecessor, Bell Atlantic for the world's largest wireless company at the time AirTouch Communications. Vodafone then established a nationwide U.S. network after agreeing to join its mobile components with Bell Atlantic. Bell Atlantic would eventually merge with GTE Corporation creating Verizon Communications Bloomberg reported.
Verizon then acquired several companies on its way to becoming the largest mobile phone company in the United States. After not receiving their portion, Vodafone received a payout for dividend payments from the deals last year, for the first time since 2005.
In 2004, Verizon and Vodafone were close to an acquisition when Vodafone agreed to sell its part in Verizon Wireless if it was successful in winning a bid for AT&T Wireless Bloomberg.com reported.
Negotiations for the deal with AT&T and Verizon did not work out. While Vodafone had a choice to sell its stake in Verizon Wireless in 2006 and 2007, the company let it expire.
