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Verizon Communications Inc. Message Board

  • sushibn sushibn Mar 8, 2013 7:19 PM Flag

    Why a merger with VODAFONE (VOD) make more sense....

     

    If VOD sells its stake in VZW they'll get slammed with an estimated 31% capital gains tax (see today's WSJ article). So your $112B gets chopped down to $77B after taxes. This is one reason a merger may result in more value to VOD shareholders. The merged firm could spin off or sell operations that they don't want. It would create a giant global telecommunications firm with various advantages. VZ wouldn't have to raise a ton of debt to finance a buyout. Perhaps you should check out the BAML research report.

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    • Logistics of a merged company are also nightmare. If it was to be a merge, it would have happened. The management at vod has been divesting itself of businesses the last couple of years. Vz is next. They make some cash to tighten up, maybe save some tax with some payoff in stock, still have a piece but much smaller,so no need to lose pride because you have no input.

 
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