Vodafone Confirms Talks About Stake Sale In Verizon Wireless
Even assuming a $130 billion price tag, with roughly half funded by debt, such a deal would increase Verizon's pro forma earnings per share by 13 percent in 2014, Nomura analyst Adam Ilkowitz said in a research note.
"As Verizon would own 100 percent of arguably the best wireless asset in the country, in addition to a modestly improving wireline business, we believe the market should support this deal even at this lofty multiple," Ilkowitz said.
With 2012 free cash flow of $28.6 billion at Verizon Wireless, RBC Capital Markets analyst Doug Colandrea said Verizon has the ability to pay back debt raised to fund the deal "very rapidly."
The only M&A deals bigger than this would be Vodafone's $203 billion takeover of Germany's Mannesmann in 1999 and AOL's $165 billion acquisition of Time Warner the following year.
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