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Verizon, Vodafone buyout talks said reignited

Vodafone Group Plc said it's in discussions with Verizon Communications Inc. over a sale of its 45 percent holding in their Verizon Wireless venture to the U.S. carrier.

The companies are in advanced talks about a sale of the stake for about $130 billion, according to people with knowledge of the matter. Verizon is working with several banks to raise $10 billion from each, or enough to finance about $60 billion of the buyout, said two of the people, who asked not to be identified because the talks are private.

In a statement Wednesday, Vodafone said there is "no certainty that an agreement will be reached."

A transaction would end a partnership of more than a decade that has paid billions in dividends to Vodafone while constraining Verizon from full ownership of the most profitable U.S. mobile-phone company. At $130 billion, the deal would be the biggest since Vodafone's acquisition of MannesMann AG in 2000 and would give the U.K. carrier's finances a boost as it tries to revive operations hurt by Europe's debt crisis.

"The reasons for a deal are well-rehearsed -- Verizon has rising other post-employment benefits liabilities and taxes it must address, and the debt markets may not be this benign forever," Robin Bienenstock, an analyst at Sanford C. Bernstein in London, wrote in a July 19 note. "Vodafone on the other hand sees the coming weakness in the U.S. market and needs the cash to resolve structural problems at home."

As part of the acquisition, Verizon will probably sell back to Vodafone its 23 percent stake in Vodafone Italia, which could be worth about $5.3 billion, said two of the people.

Verizon and Vodafone have for years tried to resolve their relationship, with options ranging from a buyout of the venture to a full merger of the two companies, according to people familiar with the matter.

Bob Varettoni, a spokesman for Manhattan-based Verizon, declined to comment.

The U.S.-listed shares of Vodafone rose $2.39, or 8.13 percent, to $31.80 . Verizon rose $1.26, or 2.71 percent, to $47.82.

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