Vodafone and Verizon pondered merger before wireless deal

10th Oct 2013 10:41

As part of negotiations for their jointly owned wireless business, it has emerged that Vodafone boss Vittorio Colao proposed a merger with US co-owner Verizon instead of a sale. Ahead of a shareholder vote on the $130bn deal, Verizon made a regulatory submission late on Wednesday that revealed a January offer of $95bn for Vodafone's 45% stake in Verizon Wireless was rejected by Colao and Chairman Gerard Kleisterlee.Vodafone's Chief Executive Officer instead suggested "that Verizon consider a possible merger of Verizon and Vodafone", which the US company said it considered at several board meetings and hired legal counsel. Verizon was eventually moved to deny its interest in a merger after a Financial Times blog cited unnamed sources for a report that Verizon was working on a joint bid for the FTSE 100 company.The New York-headquartered telecoms giant upped its bid to $120m in June, after hiring former Morgan Stanley mergers and acquisitions head Paul Taubman.Chief Executive Lowell McAdam then made a "best and final" offer of $130bn at the end of July, said to be the third-largest deal in corporate history, which its London partner accepted.The documentation from Verizon, whose shareholders are due to vote on the deal soon, divulges it would have to pay a break free of as much as $10bn if the deal fall through.OH