Verizon sale the decade’s biggest

Vodafone Group Plc completed the biggest sale of the past decade yesterday, leaving the wireless carrier about half the size it was, as chief executive Vittorio Colao embarks on a new expansion strategy.

After the disposal of its 45% stake in Verizon Wireless, the biggest US mobile phone company, Vodafone will pay out $82.5bn (€60bn) to shareholders and consolidate its shares, cutting its market value to about £60bn (€72bn) starting next week. Its value was £116bn, based on last month’s 12-year high of 240 pence.

Colao has spent his tenure pulling Vodafone out of joint ventures and partnerships it doesn’t control. Now that Colao has pulled off his biggest sale, he has to find somewhere to grow as the company grapples with shrinking service revenue in its main European markets.

“The next few months are going to be tough,” said Guy Peddy, a London -based analyst at Macquarie Bank. “Vodafone continues to lose share and is losing share in its major markets at an accelerated rate because it is facing convergence competition from incumbents and price competition from smaller players.”

After pulling off the $130bn sale, Vodafone will drop from the world’s second-biggest phone company to the fourth, measured by market value, behind China Mobile, AT&T and Verizon Communications, data compiled by Bloomberg showed. Vodafone’s weighting in share indexes such as the FTSE 100 in London will be cut approximately in half.

Shareholders will get a return of about 102 pence per share. That’s about €17.4bn in cash and about €42.6bn in Verizon Communications shares.

“This is a great day for Verizon,” its CEO Lowell McAdam said. “The new Verizon now has full ownership of the US wireless industry leader in network performance, profitability and cash flow.”

Vodafone investors will get the stock portion of the payout on Monday, with the cash on March 4.