Stars Aligning for Verizon and Vodafone

Verizon Communications’ desire to eventually take full control of Verizon Wireless by purchasing the stake held by London-based Vodafone has never been a secret. But Verizon executives have been more vocal than usual about the issue in recent weeks, leading investors and analysts to believe Verizon plans to take action this year.

Indeed, the timing may finally be right. Low interest rates make financing easier and have contributed to the 22% run-up in Verizon's stock price over the past year as yield-hungry investors have flocked to its dividend. Vodafone's U.S.-listed shares are flat in the same period. The British pound is weak. And Verizon has also completed a management transition, giving it the stability necessary to execute the deal. Any deal would still be a big undertaking. Verizon Wireless, the No. 1 U.S. carrier by subscribers, is valued at $248 billion, based on a multiple of 7.5 times 2013 estimated earnings before interest taxes, depreciation and amortization, according to UBS. That makes Vodafone's 45% stake valued at about $112 billion.