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Vodafone Group Soars as Verizon Considers Options

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LONDON -- Shares in Vodafone  (LSE: VOD  ) (NASDAQ: VOD  ) leaped 6.1%, or 10.30 pence, to reach 178.90 pence in early trade this morning, following news from across the pond that Verizon Communications  (NYSE: VZ  ) is mulling over its options regarding its relationship with the U.K.-based telecommunication group. This could lead either to the U.S. company buying out Vodafone's stake in Verizon Wireless, or a tie-up between the two.

Reports from Bloomberg state that representatives from the two Goliaths met as recently as December, at which the option of a full merger was discussed. With Vodafone valued at 83 billion pounds and Verizon at 90 billion pounds, a combination of the two would form history's biggest corporate merger.

However, it is believed that talks stalled mainly over leadership and the location of a new company, which means that a buyout or partial sale of Vodafone's stake in Verizon Wireless is more likely, according to sources. Additionally, a merger would bring with it outside scrutiny concerning a potential adverse impact on competition.

Verizon's interest in gaining full control of the Verizon Wireless operation is understandable, as it is its most profitable division. Vodafone's current 45% share is thought to be valued at around $115 billion, which would inject a considerable cash pile into its coffers should a deal be reached. Discussions are set to resume this year.

If you already hold Vodafone shares and you're looking for a stock on a similar yield, then you may wish to read this exclusive free in-depth report. The FTSE 100 company in question offers a 5.7% income, and might be worth 850 pence versus around 730 pence currently. Just click here to download the report -- it's absolutely free.


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