Verizon Communications is set to take full control of its US mobile phone business – Verizon Wireless.
It is paying $130 billion dollars – almost 100 billion euros – to buy out its long term partner, Britain’s Vodafone, which owns a 45 percent stake in the Verizon Wireless joint venture.
Reuters reported a full announcement was expected after the London stock market closes on Monday, and after the board of Verizon meets to vote on the proposed transaction for the biggest mobile operator in the United States.
The Vodafone board has voted in principle to back the deal, one person familiar with the situation told Reuters.
The deal ends a decade-long corporate stand-off and a fraught partnership.
Vodafone will become smaller, less profitable and more reliant on its mature European markets.
But it is expected to use the money from the sale to rebuild through acquisitions and higher investments in its networks.
Vodafone entered the United States in 1999 through a series of deals that resulted in the formation of Verizon Wireless in 2000, with Verizon Communications holding 55 percent of the company and Vodafone the rest.
But the two sides clashed almost immediately and the partnership has over the years been fraught with difficulties, with both partners at times seeking to buy out the other.
Verizon at one point withheld dividends from Vodafone for six years in a bid to force the British group out. Those efforts were resisted by Arun Sarin, who led the company from 2003 to 2008, and then by current boss Vittorio Colao.
Their resistance, often in the face of investor demands for a sale, may prove to have been a masterstroke. Verizon Wireless became the largest operator in the United States, a growing market that boasts higher margins and prices than in Europe.
The cash coming out of the U.S. business also helped the British group mask the pressures it was under in Europe, where its assets have been hit by recession and regulation. Full-year results to March 2013 showed that more than half of the group’s adjusted operating profit came from Verizon Wireless.
For Verizon, it is unfettered access to that cash that makes the deal worth $130 billion, and the improved relations between the two companies, led by Colao and Verizon’s Lowell McAdam, has helped pave the way, sources have said.