Vodafone has confirmed it is in talks with US company Verizon Communications over the sale of its 45% stake in their joint venture, Verizon Wireless.

Reports earlier this year suggested that Verizon was looking to buy Vodafone’s stake in Verizon Wireless for about $100bn (£64.5bn).

However, there has also been speculation that the stake is worth more than this.

Shares in Vodafone jumped 9% following the company’s announcement.

Vodafone said in a statement: “Vodafone notes the recent press speculation and confirms that it is in discussions with Verizon Communications Inc. regarding the possible disposal of Vodafone’s US group whose principal asset is its 45% interest in Verizon Wireless.

“There is no certainty that an agreement will be reached.”

Verizon Wireless is the largest and most profitable phone operator in the US, with 100 million customers.

The deal would be one of the largest corporate transactions of all time if it goes through, and would provide a large cash injection for the UK telecoms firm, but would leave Vodafone without a highly profitable non-European partnership.

Verizon has been looking to buy out Vodafone’s stake in Verizon Wireless for some years, however, price has been a consistent hurdle.

Another potential problem with a deal, analysts say, is how to arrange it so that Vodafone is not landed with a huge tax bill.

Profit fall

Vodafone’s stake in Verizon Wireless, the US mobile market leaders, has become more important as performance in its key European markets has cooled.

In May, Vodafone revealed a 90% drop in annual net profit after charges relating to poor trading in Italy and Spain.

Profit after tax for the year was £673m compared with £7bn the year before.

However, sales have risen in the first quarter of its financial year, helped by emerging markets in Africa and Asia.

In June, Vodafone agreed a deal to buy German cable operator Kabel Deutschland for 7.7bn euros (£6.6bn; $10bn).

Source:BBC