US mobile telecommunications provider Verizon is preparing to offer to buy Vodafone out of their Verizon Wireless joint venture partner Vodafone for a much $100 billion, Reuters reported today.
Verizon Communications and UK mobile operator Vodafone set up Verizon Wireless in 1999. The joint venture offers mobile services including LTE across the US and has 115 million subscribers.
Accoring to sources "familar with the matter", Verizon is "trying to push aggressively" to acquire Vodafone 45% stake.
One issue facing Vodafone, however, is a potential capital gains tax bill of up to $20 billion, one source said. That could be avoided if Verizon and Vodafone merged, the source added, although Verizon specifically denied any intention to merge with or acquire Vodafone earlier this month.
The deal would be the culmination of a long-held ambition for Verizon, Gartner analyst Margaret Schoener told Information Age last month.
"Verizon has always wanted to be able to get back ownership of their successful market here, so that just makes more logical sense," she said. "Distributing money to Vodafone will become a drain for Verizon if it continues."