US titan Verizon Communications has obtained regulatory approvals from the Federal Communications Commission (FCC) for its US$130bn buyout of Verizon Wireless.
Verizon agreed to acquire Vodafone Group’s 45% stake in Verizon Wireless in September for…
US titan Verizon Communications has obtained regulatory approvals from the Federal Communications Commission (FCC) for its US$130bn buyout of Verizon Wireless.
Verizon agreed to acquire Vodafone Group’s 45% stake in Verizon Wireless in September for US$58.9bn in cash and US$60.2bn in Verizon stock, plus other assets, so it could consolidate the US mobile operator.
The fact that Vodafone shareholders will receive a large amount of Verizon stock means there is a chance that, when the takeover closes, more than 25% of the US telco will be held by foreign individuals.
Verizon estimates that between 24.3% and 25.3% of its stock will be held by overseas investors. Once foreign ownership passes the 25% benchmark, it is at the FCC’s discretion as to whether or not to permit a transaction.
In a filing the FCC said it would not serve the public interest to prohibit a widely dispersed body of shareholders from holding aggregate foreign ownership in Verizon in excess of the 25% figure.
It also approved Verizon’s prohibition of individual foreign shareholders owning more than 5% of its stock.
Randal Milch, Verizon’s EVP of public policy and general counsel, said: “This application approval … marks the first use of the streamlined foreign-ownership review procedures that the FCC adopted earlier this year.”
The transaction remains subject to customary closing conditions, including the approval of both companies’ shareholders. The transaction is expected to close before 31 March 2014.
Guggenheim, JP Morgan, Morgan Stanley and Paul Taubman are serving as lead financial advisers to Verizon. Barclays and BofA Merrill Lynch are also providing financial advice.
Wachtell, Lipton, Rosen & Katz and Macfarlanes are serving as transaction counsel to Verizon, and Debevoise & Plimpton is advising the telco on its debt financing.
Vodafone has been advised by Goldman Sachs and UBS.
