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.
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Sam Robson owns shares of Vodafone. The Motley Fool recommends Vodafone. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.