The buyout deal, as and when it happens, will essentially be a value unlocking exercise and both parties stand to benefit, although benefits for Vodafone may be apparent a bit too quickly. For Verizon, the gains may be dampened by the high cost it will need to pay to acquire the stake. In the past, discussions regarding a merger between the companies stalled, as Verizon is not interested in moving to Europe and neither is Vodafone Group Plc (ADR) (NASDAQ:VOD) chief Colao in giving way to new management as yet.
If there is one party that will be adversely affected by the transaction, it has got to be AT&T Inc. (NYSE:T), which remains the leader in the US wireless telecom despite tough competition from Verizon Communications Inc. (NYSE:VZ). Full control over its fast growing wireless business will give Verizon extra elbow room to compete with its larger rival. AT&T also made some progress in similar vein by proposing to acquire T-Mobile before its efforts were cut short by hostile regulators. Overall, investors in Vodafone Group Plc (ADR) (NASDAQ:VOD) stand to benefit from the windfall if the deal goes through, while Verizon and AT&T could face some pressure depending on how the talks progress.
The article Verizon Wireless Could Bring Windfall to Vodafone originally appeared on Fool.com and is written by Jacob Wolinsky.
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