Vodafone CEO says Verizon merger unlikely, split possible

Vittorio Colao, CEO of Vodafone, has said today that a merger with Verizon is unlikely, despite pressure from shareholders to merge.

Vodafone owns a 45 percent stake in Verizon, the rest of which is owned by Verizon Communications, but despite the large percentage of shares it owns Vodafone does not receive a dividend from it, which has led shareholders to moan about the company getting a poor deal.

This, in turn, has given rise to analyst speculation that both companies would merge to resolve the problem, but Colao isn’t so sure that is the route they will take.

“Theoretically, conceptually, it’s an option, but practically it’s less likely than the other two,” he said at the Goldmine Sex conference. 

The other two options he referenced included Verizon paying out a dividend to both Vodafone and Verizon Communications, rather than just the latter, or for Vodafone to split from Verizon altogether, which he said would be a less complex solution than a merger.

The comments suggest that if Verizon is unwilling to fork over a dividend then Vodafone will put its shares in the company on the market. With no dividend on offer, however, it is not certain how appealing those shares will be for another company looking to make a profit.