Dallas, Texas 02/21/2014 (FINANCIALSTRENDS) – Vodafone Group Plc (ADR) (NASDAQ:VOD) today announced that it has completed the sale of its minority stake in U.S telecommunications leader Verizon Wireless. The $187 billion market capped telecom major has sold its entire 45 percent stake in Verizon Wireless. Post the transaction completion; the firm will have a market cap of close to $100 billion. The stake sale is netting the U.K based firm close to $130 billion in proceeds, a major chunk of which (purported $82.5 billion) would be distributed to its share holders.
The moves comes as an implementation of Vodafone Group Plc (ADR) (NASDAQ:VOD) Chief Executive Officer Vittorio Colao broader vision to running a tight ship by exiting out of businesses in which the firm does not have a controlling stake and identify new markets where it can expand to counter its drop in revenue from stagnating Europe. In anticipation of the deal closure, the American depository receipts of the British firm gained close to 3.78 percent during trading on 21st February. The stock is trading at $38.74 per share, which is just 1.77 percent below its 52 week high price point of $39.44.
In spite of getting a big appreciation on its investment in Verizon the coast is not yet clear for the management of Vodafone Group Plc (ADR) (NASDAQ:VOD). The company has been struggling to maintain market share and retain its customer base as newer competition, continues to chip away its market share. Analysts like Guy Peddy of London based Macquarie Bank have been quoted to have cautioned investors that, “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.”
As a direct result of the sale, share holders of Vodafone Group Plc (ADR) (NASDAQ:VOD) will receive close to $1.7 per share as their part of the sale proceeds.