Verizon aims to raise around USD 50 billion of the purchase price through bank financing, with the remainder to be paid in its own shares. The US operator's board is expected to discuss details of the potential buy-out next week at a scheduled meeting. A Verizon spokesman declined to comment, apart from reiterating that the company would be a willing buyer of Vodafone's share in Verizon Wireless.
One of the main obstacles to a deal so far has been the expectation that Vodafone could incur a tax bill of around USD 20 billion. However, Reuters' sources said any deal would be structured so the eventual tax bill would be USD 5 billion or less. Under the plan, Verizon would buy Vodafone's US holding company that owns the British group's Verizon Wireless interest as well as some other assets in countries such as Germany and Spain. That structure would allow Verizon to take advantage of a provision in British tax law giving a tax exemption on capital gains realized from the sale of a substantial stake in another company.
