Vodafone puts retreat from US on the agenda

Jason Niss
Sunday 22 December 2002 01:00
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Vodafone is to consider pulling out of the US by selling its 45 per cent interest in Verizon Wireless for $20bn (£12.5bn).

The mobile phone giant, which last week announced that chief executive Sir Christopher Gent was retiring, has the option to sell the stake to its partner Verizon Communications in two $10bn tranches.

Vodafone's board will have to decide before Arun Sarin, the US-based phone executive who replaces Sir Christopher, assumes the helm of the mobile giant.

It is assumed by analysts that as Mr Sarin built up the business that Vodafone merged with two others to form Verizon Wireless, he would not want to sell the US stake. However, Vodafone's chairman, Lord MacLaurin of Knebworth, said no decision had been made.

He told The Independent on Sunday that the board would make a decision on whether to exercise the option and sell the Verizon stake at a meeting early in the new year. "The issue is high on our agenda," he said. Some of Vodafone's largest shareholders have been pressing for the group to sell the Verizon stake to cash in on the high price that its US partner would have to pay.

The appointment of Mr Sarin, who stood down from an executive role at Vodafone in 2000 and has been working for an investment fund, has been seen by the City as a sign that Vodafone will move away from the acquisition-led strategy favoured by Sir Christopher.

Lord MacLaurin confirmed this was likely, but said the group would review its long-term strategy at an executive conference in the summer.

Vodafone recently lost the battle to gain control of Cegetel, the French mobile phone business that is being bought by Franco-American media group Vivendi.

However, it has not given up the quest to expand in France and will keep its minority stake in Cegetel in the hope that the rest of the business comes back on to the market.

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