After months of rampant speculation, majority owner Verizon Communications signed off on the purchase of Vodafone’s 45pc stake on Monday.

The deal will put an end Vodafone’s 14 years in the US, which has often been characterised by disagreements between the two partners, and is likely to have several knock-on effects.

The deal will be made up of cash, Verizon shares and loan notes, as well as seeing Verizon Wireless’s 23pc stake in Vodafone Italia handed back to the British company

Vodafone said it would hand back $84bn to shareholders, equivalent to 112p a share and representing 71pc of the net proceeds from the deal.

Under the deal, Vodafone will receive $58.9bn (£38bn) in cash, $60.2bn in Verizon shares, and an additional $11bn from smaller transactions, Verizon said in a statement.

The statement was published after the stock market closed in London. Exchanges in the US were closed for Labor Day.

Shares in Vodafone rose 3.3pc to 214p in London on Monday – the highest level for nearly a decade.

In the UK, MPs are watching the transaction carefully after weekend reports suggested that part of the deal’s viability stems from a structure enabling tax liabilities to be reduced from as much as $40bn to just $5bn.

Margaret Hodge, head of the public accounts committee, said: “HMRC must begin an absolutely thorough investigation to make sure that UK taxpayers receive the maximum to which they are entitled.”

The sale is a coup for Lowell McAdam, chief executive of Verizon, who has managed to bring the deal to the table after years of Vodafone refusing to consider the disposal.

However, credit rating agency Moody’s downgraded Verizon’s long term debt rating to BAA1 following the announcement.

Vittorio Colao, the Vodafone chief executive, will be under pressure to come up with a fresh plan to use the vast cash windfall – and prove he has neither sold Vodafone’s key asset nor turned the company into a takeover target.

source:  Telegraph