British telecoms company Vodafone has confirmed it is in talks with Verizon to sell its stake in their US joint venture Verizon Wireless.
Reportedly the price would be around 130 billion dollars (98 billion euros).
Vodafone owns 45 percent of Verizon Wireless, which is the leader in the US mobile phone market.
With business waining in its core European markets, Vodafone has been looking to sell but said it would do that at the right time and for the right price.
Analyst Joe Rundle from ETX Capital is confident it will happen: “This deal’s effectively been trying to be done for about 10 years and it’s the first time Vodafone has really come out and said we’re on the table, negotiating. So I think they must be fairly far down the route to be able to do it so I will expect it to go ahead.”
Verizon has long wanted to gain full ownership of a rapidly growing network that generates billions of dollars in free cash flow, but the companies couldn’t agree on its value.
Previously Verizon was reportedly looking to pay about 100 billion dollars.
The Wall Street Journal said significant shifts in financial markets, such as rising interest rates as well as changes in the US mobile phone business had brought the two sides closer together.
The two companies also own a cross holding in Vodafone Italy, which could form part of the deal, with Verizon possibly selling its 23 percent back to Vodafone, which has 77 percent, sources told Bloomberg.
Vodafone has changed its strategy from being a pure mobile operator, where revenues are under pressure from competition and regulation, to offering combined services such as television and fixed line broadband. To that end it has agreed to buy Kabel Deutschland for 7.7 billion euros.
Shares in Vodafone jumped on confirmation of the talks. Verizon’s shares also rose.