CEO: No Compelling Reason for Verizon-Vodafone Deal

Channel Partners

April 6, 2010

1 Min Read
CEO: No Compelling Reason for Verizon-Vodafone Deal

A merger between Verizon Communications Inc. (VZ) and its wireless venture partner doesn’t look likely.

Last week, reports of a tie-up of $179 billion or more were running rampant through the United States and England, where Vodafone is headquartered. But on April 6, Verizon CEO Ivan Seidenberg downplayed such a union.

“Absent new information, a merger doesn’t seem to have a lot of appeal,” Seidenberg told reporters at a Council on Foreign Relations event.

Verizon holds a 55 percent stake in Verizon Wireless; Vodafone owns a 45 percent stake.

“This notion of a global, wireless-only carrier is no longer the preferred model” because there wouldn’t be enough growth to justify the deal, Seidenberg said, according to Reuters.

One of the reasons Verizon was said to be in search of a Vodafone acquisition was money. Verizon Wireless is almost finished paying down outstanding debt, which would mean it would need to start paying Vodafone its share of the bounty — a requirement it has been able to defer until now, and one Verizon is looking to avoid.

In spite of that, Seidenberg stuck to his comments on Tuesday, although he noted his position could change. For now, though, “There’s no compelling reason that this is an exciting thing to do,” he said, according to the Wall Street Journal.

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