News > Deals
Bell Atlantic-Vodafone pact
September 21, 1999: 9:35 a.m. ET

U.K. firm join in forming new U.S. wireless telephone venture
graphic graphic
NEW YORK (CNNfn) - Bell Atlantic and Britain's Vodafone AirTouch PLC agreed to a much-anticipated deal early Tuesday to form a new wireless telephone operation in the United States.
     The companies had admitted they were in talks last week,
     Under terms of the venture, which will have a market value of more than $70 billion, Bell Atlantic will own 55 percent of the new business and Vodafone 45 percent.
     The deal combines the nationwide wireless network of Bell Atlantic (BEL) with the U.S. holdings of Vodafone (VOD), Britain's largest cellular provider. The venture also will draw on the cellular assets of Texas-based GTE Corp. (GTE), whose merger with Bell Atlantic is expected to close early next year.
     The companies said the new operation will serve about 20 million wireless customers and 3.5 million paging customers throughout the U.S. The deal is expected to close in six to 12 months.
     Bell Atlantic will manage the new business, which it sees as a way to attain the national reach it has sought in its attempt to be a leading player in wireless communications. The regional telecom, the largest of the U.S. "Baby Bells," now operates primarily on the East Coast.
     "This is a logical fit, naturally uniting our U.S. properties and strong management teams, and enhancing the benefits of Bell Atlantic's merger with GTE," Bell Atlantic CEO Ivan Seidenberg said.
     The pact also signals a rapprochement between Bell Atlantic and Vodafone after the British company outbid Bell Atlantic for control of AirTouch earlier this year. After that deal, Bell Atlantic dissolved its existing PrimeCo joint venture with Vodafone.
     Vodafone stock rose 1 percent to 1,313 pence in London on confirmation of the deal. Vodafone ADRs gained 3-7/16 to 212 Monday in New York.
     Bell Atlantic stock closed down 7/8 at 63-5/8 in New York Monday.
     The companies could decide to split the venture off as a separately traded stock. In the statement announcing the deal, Vodafone said that after three years it could sell shares of the wireless business through a holding company in an IPO. Bell Atlantic could initiate an IPO at any point after the deal closes, but Vodafone will be entitled to participate in any such move.
     The deal already has been approved by the boards of both companies. Regulators and Vodafone shareholders must approve the plan. Back to top


Bell, Vodafone confirm talks - Sept. 13, 1999

Bell Atlantic reported to be near deal - Sept. 12, 1999


Bell Atlantic

Vodafone AirTouch

Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney