LONDON -- Shares in Vodafone (VOD +0.78%) (VOD 2.73%) 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 (VZ 0.74%) 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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