Verizon Communications Inc. (NYSE:VZ) and Vodafone Group plc (LON:VOD) are reportedly going to receive a dividend of $7 billion in June from their subsidiary Verizon Wireless. Verizon Wireless, the largest U.S. mobile service provider, is owned 55% by Verizon Communications and 45% by Vodafone.
Verizon Communications has an interest in buying out Vodafone’s stake in the venture if a price is agreed upon. Reuters reported last month that Verizon is preparing a $100 billion for the stake, but investors are speculating that Vodafone wants a higher price. However Verizon CEO Lowell McAdam told JPMorgan analysts that he did not want to pay a premium price for the stake.
The Verizon Wireless board of directors agreed upon the dividend on May 9th according to a filing that the company sent to regulators. The last time that Verizon paid a dividend to its parent companies was in Q4 2012. This followed a $10 billion pay-out made in January 2012.
Verizon decided not to sanction a dividend between 2005 and 2011 because they preferred to pay down debt and and acquire other companies.
Based on the ownership of each company, the pay-out in June will bring Verizon cash payments of $3.85 billion while Vodafone will receive $3.15 billion.