The Financial Times speculated that Verizon (NYSE:
) and AT&T (NYSE:
) were considering a joint offer to aquire U.K. carrier, Vodafone
). The blog cited "usually reliable sources" that were not
Verizon issued a statement denying the rumor. Or, at least
part of it.
While saying the company had no plans to buy all of Vodafone,
Verizon did leave open the possibility of buying Vodaphone's 45
percent stake in Verizon Wireless.
The AT&T piece would give Verizon full control of Verizon
Wireless, while letting AT&T take the rest of Vodafone's
European assets. AT&T wireless head Ralph de la Vega said in
an interview with
in February that the company was looking at expansion
Analysts were skeptical about AT&T's participation in the
deal. Robin Bienenstock of Sanford C. Bernstein said that
although the company may want into Europe, the deal would be
especially expensive and complicated.
As for Vodafone's motives, the carrier is looking for ways to
add scale. Chief executive officer Vittorio Colao says he wants
to gain assets in order to be able to offer bundled Internet,
mobile and landline phone services across Europe.
reports that Bernstein analyst Robin Bienenstock said in a
research note that any deal "other than a merger is unwelcome by
Vodafone's management" adding that Vodafone management believes
that the U.S. market is more attractive than Europe for
In addition, there are tax implications for Vodafone that come
with a buyout versus a merger that make such a deal unlikely.
If an AT&T-Verizon takeover of Vodafone actually did
happen, it could represent a seismic shift in mobile roaming. The
acquisition of Vodafone's carriers would give AT&T the means
to offer American customers new roaming prices to not only the
U.K., Germany and Italy, but also Australia, Turkey, South Africa
and Egypt, according to
The big question seems to be, why would Verizon agree to an
arrangement that would give AT&T such transformational
European access? The lack of a suitable answer to that question,
plus Verizon's vehement denial that a deal is in the making,
resulted in a drop in Vodafone share prices Wednesday, according
to a late report by
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