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The mother of all M&A rumors: AT&T, Verizon to jointly buy Vodafone

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The rumors surrounding everyone’s favorite mismatched telecom partners Verizon(s vz) and Vodafone(s vod) are escalating. No longer is Vodafone considering selling its 45 percent stake in Verizon Wireless to Verizon. No longer is Verizon considering buying Vodafone. Instead, according to The Financial Times’ Alphaville blog, Verizon is teaming up with arch-rival AT&T(s t) for a possible bid on Vodafone.

FT puts the price at U.S. $245 billion, which is larger than the gross national product of all but 39 countries. According to Wireless Intelligence’s most recent global rankings, Verizon Wireless, Vodafone and AT&T are the second, third and fourth largest carriers, in that order, by revenue. In terms of total subscribers, the multinational Vodafone is the world’s second largest carrier, while Verizon and AT&T rank 16th and 18th respectively.

In short this would be one hell of an deal, and by FT reckoning it would be the largest M&A transaction in history. That should be one reason to be skeptical that it’s true. There would be some big regulatory hurdles to such a deal, though they could probably be overcome since AT&T and Verizon wouldn’t themselves be merging. The biggest reason for skepticism, though, is we’ve been hearing talk of Verizon-Vodafone deals practically since the two companies combined their U.S. mobile operations in 2000. So far they’ve all come to naught.

4 Responses to “The mother of all M&A rumors: AT&T, Verizon to jointly buy Vodafone”

  1. Nikhlesh Agrawal

    The “deal” does not make any sense to me. If Verizon is in the deal to buy only the 45 percent of VF’s verizon wireless investment, it leaves bulk of the $245 billion investment to be done by AT&T (Rest of World Operations for VF). With a $200 billion market cap, does AT&T have the muscle to buy a company worth $150-200 billion?

  2. If I were in other countries, this deal would scare the crap out of me. With this Att will become the second largest in terms of subscribers with 500 million +. Verizon gain full control of Verizon wireless and will be second largest in terms of revenues. Sprint and softbank will be 4th largest in terms of revenues and may shake up the U.S wireless industry like in japan. This is one of the main reasons vodafone wants to exit the U.S and AT&T wants to expand internationally.

    Basically this could put the U.S in full control of the global wireless industry. Lets just wait and see how this unfolds

  3. noname

    This is backwards. Vodafone should be the one acquiring Verizon Wireless and there may be some hope of breaking VZW’s death grip on their customer’s wallets.

    Oh wait. Of course, that is why that cannot be allowed to happen.

    Well, rest of the world, we apologize in advance for the utter disaster that is AT&T Wireless and regret that you’ll have to start dealing with them. God help you.