The deal should be completed in the first quarter of 2014

Verizon Communications said it will buy Vodafone's 45 percent stake in Verizon Wireless for $130 billion USD today.

According to the deal, Vodafone will receive $58.9 billion USD in cash, $60.2 billion USD in Verizon stock, and $11 billion USD from smaller transactions.

Vodafone will reportedly give 71 percent of the net proceeds to shareholders. All the stock will go to shareholders too, plus $23.9 billion USD in cash. 

The deal, which both Verizon and Vodafone's boards approved unanimously, is expected to be completed in the first quarter of 2014.

So what does this mean for both companies? Verizon will have full access to its wireless unit's cash, which will be used to speed up networks and keep competitive. Vodafone, on the other hand, will put $9.3 billion USD into improving its mobile and broadband networks over the next three years. 

“This transaction will enhance value across platforms and allow Verizon to operate more efficiently, so we can continue to focus on producing more seamless and integrated products and solutions for our customers," said Lowell McAdam, Verizon chairman and CEO. "We believe full ownership will provide increased opportunities in the enterprise and consumer wireline markets.” 

This deal was a long time coming. It all started when Verizon Communications was created in 2000 when Bell Atlantic Mobile and GTE Wireless merged. From there, Bell struck a deal with Vodafone where it invested $49.5 billion USD and Vodafone threw in $40.5 billion USD to create a wireless network.

Verizon Communications almost succeeded in buying out Vodafone's stake four years later, but the deal depended on Vodafone's bid to buy AT&T Wireless -- which would have forced it to let go of the Verizon Wireless stake. In the end, Cingular beat out Vodafone's bid for AT&T and Vodafone stuck with Verizon Wireless.  

Back in April, Verizon was contemplating a $100 billion USD bid and a 50/50 cash and stock offer for Vodafone's 45 percent stake, but advisers said this figure was too low, valuing the Vodafone holding at about $120 billion USD. 

Source: Verizon

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