Verizon CEO dismisses rumors that Verizon is in talks with Vodafone to buy out Vodafone’s 45 percent stake in Verizon Wireless, previously remarked that the deal was feasible.
Verizon Communications Inc. (NYSE:VZ) CEO Lowell McAdam has dismissed looming rumors about buying out Vodafone Group Plc (NASDAQ:VOD)’s 45 percent stake in Verizon Wireless, reports Reuters. “There’s no discussion about it,” said McAdam. The executive spoke to Reuters at the Consumer Electronics show in Las Vegas.
McAdam’s remarks come amid heated speculation that Verizon was in talks with Vodafone Group Plc (NASDAQ:VOD) about taking full ownership of their Verizon Wireless venture. Verizon Communications Inc. (NYSE:VZ), which has a 55 percent stake at Verizon wireless, has on recurrent occasions maintained that it would be interested in buying out Vodafone if the latter was willing to sell its 45 percent stake.
Rumors over the possible buyout gained momentum on Tuesday when McAdam, who today dismissed reports of ongoing claims, said that a deal would be feasible. Swiftly after McAdam’s comment on Tuesday, Vodafone’s shares were noted to have risen 2.6 percent and in addition, it stock was up close to 8 points on the FTSE 100 index, the U.K benchmark. Nonetheless, McAdam said that his Tuesday comment was not an indication of anything, citing that Verizon was not any more likely to be able to buy Vodafone’s stake now than it was before. “It’s been feasible for 10 years. There’s nothing that’s changed,” he noted.
Lucrative Wireless segment is likely to continue making headlines
Although Verizon Communications Inc. (NYSE:VZ) has publicly dismissed the rumors, the simmering speculations over the buyout have shrouded the market for a considerable amount of time. The stakes are high especially after considering Verizon Wirelesses’ steep value estimated at ballpark $200 billion and above. As such, it is very likely that speculation or solid news over the same will reappear in recurrent occasions in the future.
As we reported in October during the third quarter earnings report, Verizon Wireless generated a second consecutive quarter of record-high margins. Continued 4G LTE roll out and surging data needs suggest that this segment will remain relevant for years to come.