Verizon Communications Inc (VZ) and Vodafone Group Plc (ADR) (VOD): What’s Going On?

Wireless powerhouse Verizon Communications Inc. (NYSE:VZ) could take over the world one day (or, at the very least, the world of 4G LTE communication… in America), but when it comes to taking complete control of one of its own brands, Verizon Wireless, the company has lumbered around like an awkward behemoth tripping over its feet. Judging from CEO Lowell McAdam’s recent comments around the Consumer Electronics Show, the company is still hungry for more… or is it? What could be going on that keeps Verizon from ultimately taking the plunge?

A brief history of Verizon Wireless
The $78 Billion Question Affecting Dividend Stocks TodayVerizon and British telecom company Vodafone Group Plc (ADR) (NASDAQ:VOD) began Verizon Wireless in 2000, and quickly set about sprinkling the country with 3G, 4G, LTE, and other acronyms that few people really understood but everyone wanted for their cell phones. Verizon holds 55% of its wireless brand, and Vodafone owns the rest — but its CEO suggests that might soon change.

Straight from McAdam’s mouth
On Jan. 7, the eve of the 2013 Consumer Electronics Show, McAdams was quoted in Las Vegas as saying that Verizon remained very much interesting in being the sole proprietor of Verizon Wireless. The company “would love to own all of that asset,” and an acquisition deal was “feasible” at this point.

It might have been diplomatically worded, but McAdams’ recent statement is reportedly his strongest display of rhetoric yet on the topic of a potential buyout of Vodafone’s shares in the wireless company. The market seems pretty keen on it, too. Vodafone’s stock price rose by 2.6%, and gained 8 points on the London Stock Exchange upon the “feasible” comment. McAdams has changed his tune (slightly) since CES started, however. He clarified that the statement didn’t mean a merger was imminent, just that it was possible.

The size of the Vodafone
Verizon Wireless’s prolonged joint ownership could be due to the size of the telecom titans holding onto it. In terms of market cap, after the currency conversion, Vodafone’s $130 billion beats Verizon’s $123.4 billion. As fellow Fool Dan Radovsky detailed, buying out Vodafone’s stake in the business would cost Verizon $107 billion. That’s 86% of Verizon, and would be way too much debt to have on the books.

However, Verizon’s business possesses enough technology to provide wireless and wireline services to a much larger stretch of land than the United Kingdom. The company’s physical assets help put it on even footing with Vodafone. If this was a game of tug-of-war, it would be a 12-year draw, and a couple comments from a CEO isn’t going to change that.

What’s inside Supernova?
If you’re an investor looking for big long-term winners, Motley Fool co-founder David Gardner’s picks have frequently trounced the market. How? Because he’s always on the lookout for revolutionary stocks, and he recommends them before Wall Street catches on to their disruptive potential. If you’re interested in how David discovers his winners, click here to get instant access to a personal tour behind David’s Supernova service.

The article Verizon and Vodafone: What’s Going On? originally appeared on Fool.com.

Fool contributor Caroline Bennett has no position in any stocks mentioned. The Motley Fool recommends Vodafone. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!