­Verizon deal reduces Vodafone Group’s value by half to 100 billion dollars

Vodafone Group Plc finalizes its biggest sale in 10 years today, leaving the wireless carrier about half of the size it was, as Vittorio Colao, the companys Chief Executive Officer, started working on a new strategy of expanding Vodafone Groups reach.

Vodafones shareholders will be paid out 82.5 billion dollars after the company sells its stake in Verizon Wireless, which is estimated to 45%. This will cut the market value of Vodafone to about 60 billion pounds (100 billion dollars) but will help the company consolidate its shares. As reported by Bloomberg, Vodafones market value was estimated to 116 billion pounds, based on last months 12-year high of 240 pence.

The current Chief Executive Officer of the company – Vittorio Colao – concentrated his efforts to pull Vodafone out of the joint ventures and partnerships that are not controlled by it. Now, with the largest sale in the companys history, he is tasked to find a field for growth, while Vodafone deals with declining service revenue in its main European markets.

One of the analysts of Macquarie Bank Ltd. – Guy Peddy – said in an interview, which was cited by Bloomberg: “The next few months are going to be tough. Vodafone continues to lose share and is losing share in its major markets at an accelerated rate because it is facing convergence competition from incumbents and price competition from smaller players.”

According to data compiled by Bloomberg, Vodafone will retreat from its place of the second-biggest phone company by market value to the fourth position after finalizing the deal, which is estimated to 130 billion dollars. The first three positions will be taken by China Mobile Ltd,. AT&T Inc. and Verizon Communications Inc.

The shareholders of the company will receive a return of about 102 pence (1.70 dollars). That is about 23.9 billion dollars in cash and about 58.6 billion dollars in Verizon Communications shares.

Vodafone Group Plcs shares rose by 2.55% in London to GBX 235.45, marking a one-year change of +47.53%. According to the Financial Times, the 20 analysts offering 12 month price targets for Vodafone Group PLC have a median target of GBX 241.50, with a high estimate of GBX 290.00 and a low estimate of GBX 130.00. The median estimate represents a 5.18% increase from the last close of 229.60.