Verizon Communications Inc. (VZ) Chief Executive Lowell McAdam
believes the company could pull off the acquisition of its wireless
joint venture with Vodafone Group PLC (VOD, VOD.LN).
In an interview Monday ahead of the Consumer Electronics Show in
Las Vegas, Mr. McAdam said Verizon has long been interested in such
a deal and he thinks his company has the strength to pull it off.
He noted that the venture is functioning well and consolidation of
the ownership isn't necessary.
"We have always said we would love to own all of that asset," he
said. Verizon Wireless is 55% owned by Verizon and 45% by
Vodafone.
The wireless partnership was formed in 2000. While the joint
structure allowed the partners to pool assets and share costs at a
time when wireless was still relatively new, it has become awkward
now that the business is taking the lead role in growth for the
telecom companies.
Verizon tried to buy Vodafone's stake in 2006 but failed. A
Vodafone representative wasn't immediately available for
comment.
Since then, there have been suggestions that Verizon and
Vodafone might unwind the joint venture, and Verizon has said it
would be a willing buyer, if the price was right. However, there is
a question as to whether any such deal is feasible, given a likely
rich price tag, which some analysts peg at about $100 billion.
"I think [a deal] is feasible," Mr. McAdam said Monday. "Our
wireline business is getting stronger and as that gets stronger, it
makes it easier."
Mr. McAdam said Verizon could buy the stake from Vodafone
outright, but he noted there are "lots of different ways we could
do it."
The wireless company made $18.5 billion in dividend payouts to
the partners in 2012 after not making any distributions for years.
The first payment was for $10 billion, with the second of $8.5
billion coming close to year end.
Vodafone has been hit by problems across Europe, which
contributes around three-quarters of its revenue. The Verizon
Wireless business has been a source of strength for the U.K.
company.
"As things change in the environments that both of us operate
in, if there is an opportunity, we would always be in the position
to buy Vodafone out," he said.
He said the partners don't talk about a deal every week but that
Vodafone is aware of Verizon's position and both companies conduct
yearly reviews of their operations.
"I don't feel compelled to go out and take action to make
something happen," Mr. McAdam noted.
He said the company isn't searching for any other large
multibillion-dollar acquisitions.
Write to Thomas Gryta at thomas.gryta@dowjones.com
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