UK: Economy set for boost from £84bn Vodafone sell-off in US
- Credit: A
Vodafone is on the verge of selling its stake in America’s biggest mobile phone company in a 130billion US dollar (£84b) deal that is so big it is expected to provide a significant lift to the UK economy.
The company has confirmed it is in “advanced discussions” to dispose of its 45% interest in Verizon Wireless in what would be one of the biggest transactions in corporate history.
Cash from the deal returned to UK shareholders is expected to provide what is effectively a fresh dose of quantitative easing to stimulate the economy, to add to the Bank of England’s £375bn programme of asset purchases.
Pension funds with investments in the widely-held stock also stand to benefit.
However there is likely to be controversy over the way the deal is arranged amid reports that Vodafone’s tax liabilities will be minimised by completing the transaction through its Luxembourg subsidiaries and other offshore companies.
You may also want to watch:
The UK firm’s board was said to have met yesterday to approve the deal to sell its stake to its US partner Verizon.
In a statement, it said: “Vodafone confirms that it is in advanced discussions with Verizon Communications Inc regarding the disposal of Vodafone’s US group whose principal asset is its 45% interest in Verizon Wireless for 130 billion US dollars.”
- 1 Boss who boasted of lavish lifestyle is bankrupt with £100k debts
- 2 Felixstowe beach hut goes on sale for record price
- 3 History of the Cook cull - a look back at his busy transfer windows with Chesterfield, Portsmouth and Wigan
- 4 Woman's body found in village home
- 5 Indian Covid variant being monitored in Suffolk after one case confirmed
- 6 A14 delays as police deal with incident near Orwell Bridge
- 7 A14 re-opens after medical emergency
- 8 Couple were found 'slumped over' on their sofa, inquest hears
- 9 ‘Unique’ farm in coveted river setting hits market for first time in 60 years
- 10 ‘Demolition Man’ Cook tells vast majority of Ipswich Town squad to find new clubs
It said the deal would comprise a mixture of Verizon shares and cash.
Shareholders in FTSE 100-listed Vodafone are predicted to receive a special dividend of up to £40 billion.
According to financial services group Hargreaves Lansdown, an investor holding £5,000 of Vodafone shares might receive £2,000, with no further tax to pay as long as it is held in a pension fund or individual savings account (ISA).
Investors without direct shareholdings are likely to benefit through their pensions, with many funds holding up to 10% in Vodafone stock.
Shares in the mobile phone giant have leapt more than 8% over the past week in anticipation of the deal.