Vodafone to Pay GBP2 Billion Dividend on Verizon Agreement
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By Ben Livesey - Jul 28, 2011 2:45 PM PT
Vodafone Group Plc (VOD), the world’s largest mobile-phone company, said it will pay a special dividend of 2 billion pounds ($3.3 billion) to shareholders in February, after the board of Verizon Wireless, in which Vodafone has a 45 percent stake, agreed to pay a $10 billion dividend.
Vodafone’s share of the Verizon Wireless dividend will be $4.5 billion and the U.K. company will receive the payment on Jan. 31, it said in an e-mailed statement today. The balance of the payment from Verizon after Vodafone makes the special payment to shareholders will be used to reduce net debt, it said.
“Our long-term partnership in Verizon’s strong and successful wireless business has seen the value of our investment increase significantly over recent years,” Vodafone Chief Executive Officer Vittorio Colao said in the statement. “The dividend from Verizon Wireless allows us not only to reward our own shareholders with an immediate and sizeable cash return, but also to continue to reinvest in our business to improve our customers’ experience, further strengthen our competitive position and create additional value for shareholders.”
Vodafone Chairman John Bond told shareholders in London this week that the prospect for a dividend from Verizon Wireless, its U.S. venture, looks “very good.” Vodafone has retained its stake in Verizon Wireless even after failing to receive a dividend from the company since 2005, while partner Verizon Communications Inc. (VZ) has focused on paying down debt.
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