Verizon Says Buying Out Wireless Venture 'Feasible'

Verizon Communications Inc. (VZ) Chief Executive Lowell McAdam believes the company could pull off the acquisition of its wireless joint venture with Vodafone Group PLC (VOD, VOD.LN).

In an interview Monday ahead of the Consumer Electronics Show in Las Vegas, Mr. McAdam said Verizon has long been interested in such a deal and he thinks his company has the strength to pull it off. He noted that the venture is functioning well and consolidation of the ownership isn't necessary.

"We have always said we would love to own all of that asset," he said. Verizon Wireless is 55% owned by Verizon and 45% by Vodafone.

The wireless partnership was formed in 2000. While the joint structure allowed the partners to pool assets and share costs at a time when wireless was still relatively new, it has become awkward now that the business is taking the lead role in growth for the telecom companies.

Verizon tried to buy Vodafone's stake in 2006 but failed. A Vodafone representative wasn't immediately available for comment.

Since then, there have been suggestions that Verizon and Vodafone might unwind the joint venture, and Verizon has said it would be a willing buyer, if the price was right. However, there is a question as to whether any such deal is feasible, given a likely rich price tag, which some analysts peg at about $100 billion.

"I think [a deal] is feasible," Mr. McAdam said Monday. "Our wireline business is getting stronger and as that gets stronger, it makes it easier."

Mr. McAdam said Verizon could buy the stake from Vodafone outright, but he noted there are "lots of different ways we could do it."

The wireless company made $18.5 billion in dividend payouts to the partners in 2012 after not making any distributions for years. The first payment was for $10 billion, with the second of $8.5 billion coming close to year end.

Vodafone has been hit by problems across Europe, which contributes around three-quarters of its revenue. The Verizon Wireless business has been a source of strength for the U.K. company.

"As things change in the environments that both of us operate in, if there is an opportunity, we would always be in the position to buy Vodafone out," he said.

He said the partners don't talk about a deal every week but that Vodafone is aware of Verizon's position and both companies conduct yearly reviews of their operations.

"I don't feel compelled to go out and take action to make something happen," Mr. McAdam noted.

He said the company isn't searching for any other large multibillion-dollar acquisitions.

Write to Thomas Gryta at [e-mail]

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