Key highlights
- Vodafone announces that it has reached agreement to dispose of its US group whose principal asset is its 45% interest in Verizon Wireless (“VZW”) to Verizon Communications Inc. (“Verizon” – NYSE: VZ), Vodafone’s joint venture partner, for a total consideration of USD130 billion (GBP84 billion).
- The consideration1 comprises:
- USD58.9 billion (GBP38.0 billion) in cash;
- USD60.2 billion (GBP38.9 billion) in Verizon shares2;
- USD5.0 billion (GBP3.2 billion) in the form of Verizon loan notes;
- USD3.5 billion (GBP2.3 billion) in the form of Verizon’s 23% minority interest in Vodafone Italy; and
- USD2.5 billion (GBP1.6 billion) through the assumption by Verizon of Vodafone net liabilities relating to the US Group.
- The VZW Transaction represents an attractive valuation of 9.4x EV / LTM EBITDA and 13.2x EV / LTM OpFCF.
- Vodafone intends to implement a new organic investment programme, Project Spring, to establish further network and service leadership through additional investments of GBP6 billion over the next three financial years.
- At completion, Vodafone shareholders are expected to receive all the Verizon shares and USD23.9 billion of cash (the “Return of Value”) totalling USD84.0 billion (GBP54.3 billion), equivalent to 112p per share and representing 71% of the Net Proceeds.
- Vodafone expects that strong free cash flow generation will continue to underpin shareholder returns. The Board, therefore, intends to increase the total 2014 financial year dividend per share by 8% to 11p, and intends to grow it annually thereafter.
- Subject to the satisfaction of certain conditions precedent, the Transactions are expected to complete in Q1 2014.
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