Vodafone and Verizon finally confirm plans for the largest deal since 2000

There has been speculation since the beginning of the year that Verizon is looking to acquire the remaining stake in Cellco, which is more widely known as Verizon Wireless, from Vodafone, which has held a 45 per cent stake since the company was formed back in 2000. Yesterday saw the formal announcement of the offer by Verizon to Vodafone valuing the remaining 45 per cent stake at over $130bn.

The deal, should it complete at current pricing levels, would be the fourth largest in the history of M&A, ranking behind Vodafone’s $195bn acquisition of Mannesmann back in 1999, AOL’s $181bn takeover of Time Warner and the $176bn takeover of Smithkline Beecham by Glaxo back in 2000.

As everyone knows, dealmakers have had a tough time since 2007, with pretty much no mega-mergers of this scale making it across the finish line. 2008 and 2009 saw the aborted attempts of BHP Billiton firstly to acquire Rio Tinto and secondly to form an iron ore joint venture with Rio Tinto which were both deals that would have broken the $100bn value threshold if they had made it across the finish line.

The deal is far from complete, but is very unlikely to face many hurdles given that both boards of directors have approved the deal and with the bulk of the sale proceeds – some 71 per cent - going to the Vodafone shareholders, there will be few objections from them, so with completion of the transaction expected sometime in Q1 2014 the deal will certainly boost the overall levels of announced M&A activity in 2013 and completed M&A activity in 2014.