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Bell admits Vodafone talks
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September 13, 1999: 4:25 a.m. ET
Negotiations continue on creation of $80B U.S. cellular operator, IPO likely
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LONDON (CNNfn) - Bell Atlantic, the largest of the "Baby Bells," confirmed it's in talks to combine its U.S. wireless telephone operations with those of Vodafone AirTouch. Announcement of the deal, which would create a new company worth up to $80 billion, could come this week, according to press reports Monday.
The new cellular operation is likely have its own listing within two years, according to the Financial Times. Vodafone will have a minority share in the new venture., and its executives want an IPO for the unit to give them an exit route in case relations between the two parents grow sour, the newspaper reported.
The transaction would combine the nationwide wireless network of Bell Atlantic (BEL) with the U.S. holdings of Vodafone AirTouch (VOD), the British company that is the world's largest provider of wireless communications. Late Sunday, Bell Atlantic confirmed discussions with Vodafone on what it termed "the possibility of a U.S. business relationship".
The company cautioned that there could be no assurances of a deal being reached.
The combination would give Bell Atlantic the national reach it has long sought to become a major player in the evolving wireless communications field. The group now operates primarily in the eastern U.S., while Vodafone's Airtouch is in the West.
Relations between Vodafone and Bell Atlantic cooled after Vodafone beat out Bell Atlantic in January in an auction for Airtouch, a $60 billion transaction that created Vodafone Airtouch. Bell canceled its PrimeCo joint venture with Vodafone after losing out in the bidding for AirTouch.
Vodafone acknowledged last week that it was in talks with Bell Atlantic "to review a number of options," including a possible alliance on a mobile network.
The talks have progressed since then to focus on the structure of a deal and who would run the combined company, according to published reports. Bell Atlantic will probably own 55 percent of the new company, with Vodafone owning the rest.
Bell Atlantic stock closed Friday at 62-1/2, down 1/16. Vodafone Airtouch shares jumped nearly 2 percent in London Monday at 1,217 pence. 
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