Vodafone deal poised to drive shake-up of European telecoms

The British government is not alone in hoping that Vodafone shares the proceeds of the $124 billion raised through the sale of its stake in Verizon Wireless by embarking on acquisitions of its own. Many bankers believe that the European telecoms sector will be shaken up by the deal, the third biggest in corporate history ($130 billion including the value of Verizon’s stake in Vodafone Italy given to Vodafone as part of the disposal), not least given the heightened expectation of interest from AT&T in a more European-focused Vodafone. Such expectations have been fanned by comments by AT&T chief executive Randall Stephenson that the company remained interested in European telecoms deals. This year has been dominated by dealmaking by the technology, media and telecommunications (TMT) sector, a key driver of the upward trend in global M&A. It is a development many bankers say is set to persist. The $438 billion of deals done in the sector is at a six-year high – about 38 percent higher than the total deals announced in 2012, according to Mergermarket. The sector accounted for nearly a third of all deals globally in the year to date. Verizon’s acquisition added a third to TMT M&A. Seven of the top deals this year so far have featured TMT companies. Even without Verizon’s acquisition – the biggest for a decade – TMT would still have accounted for the sector with the largest increase at 52.3 percent year on year.