Verizon’s watershed moment for M&A financing
The telecoms company’s $130 billion acquisition deal has both M&A and debt bankers salivating at the prospects for more jumbo takeovers. Are they getting ahead of themselves?
"M&A is hard – you don’t test the edges very often," muses Robert Kindler, global head of M&A at Morgan Stanley. Verizon’s acquisition of Vodafone’s stake in its wireless business was in essence a straightforward concept: it was buying 45% of a business it already had a 55% stake in and knew everything about. But the scale of the undertaking meant that this deal very much tested the edges. "Some transactions will come out of this as a result," Kindler tells Euromoney. "There are a handful of very large deals that people now have confidence are doable."
The allocation of more than $100 billion to a single corporate bond deal certainly indicates that the market is in uncharted territory. "The implications of this deal are large – it has got everyone’s attention," says Keith Harman head of media and telecom debt capital markets at Bank of America Merrill Lynch.