Verizon Wireless on Thursday said it will pay a dividend of $10 billion in January to its owners, Verizon Communications Inc. and Vodafone Group PLC, ending a strategy of reducing debt that has frustrated Vodafone.
Vodafone, a British cellphone company with wide international interests, owns 45 percent of Verizon Wireless, yet hasn't received any cash from the U.S. carrier in years.
Vodafone shares initially rose $1.40, or 5.2 percent, in aftermarket trading in New York. Verizon gained 20 cents to $35.86.
New York-based Verizon owns the other 55 percent of Verizon Wireless and controls its operations. It will receive $5.5 billion of the dividend while Vodafone will get $4.5 billion.
Analysts have seen Verizon's strategy denying Vodafone a dividend as a way to squeeze the British company into selling its stake in the wireless carrier to Verizon.
But no deal has materialized, and Verizon itself started getting squeezed. Without dividends from Verizon Wireless, it would soon have run out of cash for its own dividend to shareholders, according to analysts. Verizon spends about $5.5 billion a year on its dividend.