Vodafone is on the brink of completing a $130bn (£84bn) sale of its 45% stake in Verizon Wireless to Verizon Communications.
The deal could bring a windfall of cash into the UK economy, with around half of the proceeds being passed on to Vodafone shareholders including British fund managers and pension funds.
However, it is understood that the deal could raise just $5bn for the UK taxman, with sources close to the company reportedly indicating that Vodafone will make use of the ‘substantial shareholdings exemption clause’ introduced in UK capital gains legislation in 2002 to keep as much as $120bn of the deal.
The company has come under scrutiny for its tax arrangements, and in August paid millions of pounds to HMRC following a dispute over the tax paid by its Irish subsidiary.
The expected sale, which is expected to be one of the biggest in corporate history, could be announced today and sent shares in Vodafone up 1.5% to 206.25p last week, valuing the company at $100bn.
Vodafone released a short statement which said it expects the buyout payment from Verizon to "comprise a mixture of Verizon common stock and cash".
It would signal the end of a long-running rivalry between the telecoms firm and Verizon as both sought to buy the other’s shares and take complete control of Verizon Wireless.
The impending deal has fuelled speculation as to whether Vodafone will become a target for bigger companies or whether it will use the money to fund its own buyouts.
The Financial Times reported that Vodafone could make an offer for Ono, the Spanish cable operator, or Italian firm Fastweb, for 7bn Euros and 2bn Euros respectively, to accelerate its convergence strategy.
Vodafone agreed a deal in June to acquire Kabel Deutschland for 7.7bn Euros, making it the largest pay-TV provider in Germany.
It also launched its 4G data service in the UK last month.
