Sarin's swansong is $28bn US deal

DEPARTING Vodafone boss Arun Sarin is set to go out with a bang after playing a pivotal role in the $28.1billion (£14.4billion) takeover of US mobile operator Alltel Corporation.

HIGH NOTE Joint venture buyout was a win win situation Sarin said HIGH NOTE: Joint venture buyout was a win-win situation, Sarin said

It is being bought by Voda­fone’s Verizon Wireless joint ­venture in which the UK com­pany owns a 45 per cent stake.

It will make Verizon Wireless, 55 per cent owned by Veri­zon Comm­unications, the biggest mobile operator in the US, catapulting it from ­second spot ahead of AT&T.

Vodafone shares surged 5fp to 160dp on hopes the takeover will significantly increase the value of the Verizon Wireless stake and earnings from the world’s biggest mobile phone market.

Sarin, who surprised the City last month by announcing his planned retirement as chief executive, said: “Both partners win in this. It’s a good relationship.”

Alltel has 13million customers in 34 states, most of them in rural areas where Verizon Wireless, with 67million subscribers, does not operate.

Subject to regulatory clearance, the deal should be completed this year, although competition authorities may demand some sell-offs in territories where the two overlap.

Verizon Wireless is paying $5.9billion for Alltel, plus $22.2billion of debt, and expects to squeeze $9billion-worth of savings from the enlarged business.

The joint venture has not paid a dividend to its owners for three years but it has agreed to review its dividend policy annually and is expected to increase tax rebate payments to its parent companies.

Alltel was taken private last November for $27.5billion by buyout firms TPG Capital, which this week agreed to buy a stake in Bradford & Bingley, and banker Goldman Sachs. Sarin admitted Verizon Wireless considered buying Alltel then but did not want to get sucked into a bidding war.

He added Vodafone wanted to hold on to its stake in the joint venture.

Analysts say Sarin’s successor, Vittorio Colao, who takes over next month, will eventually have to decide whether to sell its share and return the cash to shareholders or launch a bid to buy it outright.

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