More Rumors about Verizon Buyout of Vodafone Stake in Verizon Wireless

That  there are new rumors about Verizon wanting to acquire the rest of Vodafone’s stake in Verizon Wireless is not surprising.  Vodafone recently denied any such talks were underway.

Such denials are commonplace in both politics and business. And though the denials are not always a cover for actual talks, Vodafone’s latest quarterly financial report illustrates the reasons why some analysts and executives at Verizon, might be weighing some action to change the current ownership status of Verizon Wireless.

To be sure, Verizon also has said no such talks are underway. In fact, Verizon recently said no talks about a full purchase of the 45 percent Vodafone stake in Verizon were underway.

That would still leave some room for less complicate measures, such as a gradual purchase by Verizon of Vodafone shares. Some also would say a full-blown merger is a possibility. Sure, it might be, but such a huge deal would present at least some significant regulatory issues.

Where the U.S. Federal Communications Commission would allow Verizon to become that much bigger is a valid question, even though either a buyout of the Vodafone stake, or a full merger, would not immediately affect U.S. mobile market share.

Vodafone posted a worse than expected drop in group revenue for the last three months of 2012, and Vodafone might prefer to liquify its Verizon Wireless stake to pay down debt, for example.

Beyond that, low interest rates make acquisitions attractive at the moment, in large part because organic growth opportunities are limited.
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