By Soyoung Kim and Michelle Sierra
NEW YORK, Sept 1 (Reuters) - Verizon Communications and Vodafone plan to announce a $130 billion deal onMonday that will give the U.S. telecom giant complete control ofVerizon Wireless, subject to final board approval, peoplefamiliar with the matter said.
The announcement is expected to come after the stock marketcloses in London on Monday, after the board of Verizon meetsearlier in the day to vote on the proposed transaction, thepeople said.
Under the terms of the proposed agreement, Vodafone wouldget $60 billion in cash, $60 billion in Verizon stock, and anadditional $10 billion from smaller transactions that will takethe total deal value to $130 billion, two of the people familiarwith the matter said on Saturday.
Vodafone's board was scheduled to meet on Sunday to approvethe deal, the people said, but it was not clear what theirdecision was. Both groups declined to comment.
If the deal is concluded, it will end one of thelongest-running corporate standoffs, which has at times seenboth partners seek to buy out the other in times of weakness.For Verizon, it means that it no longer has to share thebillions in cash generated by Verizon Wireless.
On the Vodafone side, Chief Executive Vittorio Colao willget a war chest of cash to reward shareholders and potentiallycarry out acquisitions to strengthen the group's European andemerging market operations.
To fund the cash portion of the deal, Verizon has lined upas much as $65 billion in financing from four banks JPMorganChase & Co, Morgan Stanley, Barclays Plc and Bank of America Merrill Lynch, the people said. Thebanks have committed to the financing which is expected be splitevenly among the four, two people said.
All the people asked not to be identified because the matteris not public.
An agreement over Verizon Wireless would mark theculmination of on-again, off-again discussions going as far backas 2004, when Vodafone bid for AT&T Inc's wirelessbusiness in a move that would have required it to shed itsVerizon Wireless stake.
The British company lost that bid and has since held on tothe Verizon Wireless stake for its exposure to the highlyprofitable U.S. wireless market, saying it would only sell ifVerizon offered a price that was more valuable to itsshareholders than the status quo.
At $130 billion, it would be the third-largest corporatedeal of all time.
Talks picked up in earnest a few weeks ago, as Verizon grewconcerned that its window of opportunity was closing, withinterest rates due to rise and its own stock price declining.
That prompted Verizon to raise the offer price from the $100billion it had initially floated to around $130 billion, sourceshave said.
A deal would add to a spate of consolidation attempts, bothsuccessful and failed, in the telecom industry over the past fewyears. Most recently, Japan's SoftBank Corp tookcontrol of Sprint Nextel Corp, the No. 3 U.S. wireless provider,in a $21.6 billion deal.
Barclays (BARC)
Vodafone (VOD)
