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. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Burger Kings: The 10 Most Expensive Burgers in the World

The 10 Most Ethnically Diverse Countries in the World

The 10 Most Exclusive Credit Cards in the World

The 10 Most Expensive Cruise Ships in the World

The 10 Fastest Supercomputers in the World

The 10 Best Countries for Doing Business 2015

6 Most Expensive Fruits In The World

10 Worst Airlines in the World

The 10 Biggest Tax Havens in the World to Stash Your Money

The 15 Most Murderous Countries in the World

10 Largest Colleges in the World: Bigger Isn’t Always Better

Comedians in Cars Getting Coffee: The 6 Comedians Seinfeld Needs to Interview

Easy Money: The 10 Most Successful Investors in the World Today

The 10 Most Deadly Diseases in the World Today

The 5 Most Expensive Luxury Motorhomes in the World

20 Largest Stock Exchanges in the World

6 Richest Painters In The World 2014

The 6 Countries with the Best Hospitals In The World

10 Largest Beer Brewing Companies in the World

The 10 Richest Fitness Gurus In the World to Pump You Up

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!