Thoughts on an AT&T Vodafone Bid: A Powerful Vision with Many Hurdles

Brian Washburn
Brian Washburn

Summary Bullets:

  • The AT&T blueprint for acquiring Vodafone lines up neatly, but undercurrent factors are going to be a challenge.
  • AT&T’s bold vision for a Vodafone acquisition is commendable, but it’s not clear why Vodafone would cooperate.

In our day jobs, we analysts tend to rein in speculation based on rumor, and instead address more immediate, concrete issues. But when media sources break a story like AT&T’s reportedly building a case to bid for global wireless giant Vodafone, it’s too tempting to pass up. The pieces for the business case fall neatly into place. For a while now, AT&T reportedly has been on the lookout for wireless partners abroad. Vodafone is finally unraveling its Verizon Wireless stake, clearing a potential conflict-of-interest issue. Vodafone is not tied to national interests that could quickly scuttle a deal (see America Movil’s recent rejected bid of KPN). AT&T might ease financing an acquisition by tapping the pile of cash Vodafone inherits after unraveling of the Verizon Wireless stake. AT&T could sell Vodafone operations in Africa/Middle East, Russia/CIS, Asia and Latin America to partners, to defray the costs further and make the acquisition more affordable. Continue reading “Thoughts on an AT&T Vodafone Bid: A Powerful Vision with Many Hurdles”