Verizon Communications agreed on Monday to pay $130 billion to buy Vodafone out of its U.S. wireless business, signing history's third largest corporate deal to bring an end to an often fractious 14-year marriage.

The two firms said Vodafone would get $58.9 billion in cash, $60.2 billion in Verizon stock, and an additional $11 billion from smaller transactions in a deal that is due to close in the first quarter of next year.

The British group will return 71% of the net proceeds to shareholders, including all of the stock, in a sign that it does not expect to go on a new acquisition spree across its remaining core European and emerging markets.

The move to sell out of the joint venture closes a heady expansionist chapter for Vodafone, one of Britain's best-known companies, which grew rapidly over the last 20 years through a spate of aggressive deals, taking its brand into more than 30 countries across Europe, Africa and India.

The deal is also likely to be the defining event in the careers of Vittorio Colao and Lowell McAdam, the chief executives of Vodafone and Verizon, who rebuilt relations between the two sides, which had long argued over issues including the level of dividends to be paid from Verizon Wireless.

The deal will become the third largest announced deal in the world after Vodafone's $203 billion takeover of Germany's Mannesmann in 1999 and AOL's $181 billion acquisition of Time Warner the following year.

"This has been a highly productive partnership in a business with excellent momentum," Colao told reporters, adding that he was "super committed" to the next chapter of the company. McAdam said simply that the time was right to buy.

"Today's announcement is a major milestone for Verizon, and we look forward to having full ownership of the industry leader in network performance, profitability and cash flow," he said.

UNANIMOUS BACKING

The boards of Verizon and Vodafone unanimously approved the sale.

The deal will give Verizon full access to the wireless unit's cash, handing it fresh firepower to invest in superfast mobile networks and fend off challengers in a U.S. market expected to grow more competitive in the coming years.

Verizon said it expected the transaction to be immediately accretive to earnings per share by about 10 percent, excluding any one-time adjustments.

While Vodafone will lose its best asset, it will get a war chest that it can use to reward shareholders and bolster its European operations, which are under pressure from recession and tough regulation.

The British firm said it planned to launch a new investment phase dubbed Project Spring to improve its mobile and broadband networks over the next three financial years.

After returning $84 billion of the sale proceeds to its shareholders, Vodafone will be left with a $30 billion cash pile. Some $10 billion will go to the Project Spring network investment programme and the rest will be used to pay down debt, bringing down leverage to one times forward operating profit (EBITDA).

Surprisingly, Vodafone is keeping little of the cash on hand for acquisitions, although Colao said that the group could always borrow later if attractive deal opportunities crop up that would create value for shareholders.

Asked where he might consider acquisitions, Colao said only: "I would say first let's complete the deal, then we will talk about our strategy."

Both groups said they would be in a position to increase their dividend. Verizon declared a quarterly dividend of 53 cents per share, an increase of 1.5 cents, or 2.9 percent, from the previous quarter. Vodafone announced an 8 percent increase to its total 2014 financial year dividend per share.

Vodafone will be left with a U.S. tax liability of around $5 billion.

Boutique M&A firm Guggenheim Partners advised Verizon on the deal, as did Paul Taubman, a former banker at Morgan Stanley.

A group of banks - JPMorgan, Morgan Stanley, Bank of America Merrill Lynch and Barclays - will underwrite just over $60 billion in debt financing to fund Verizon's deal, sources earlier said.

Goldman Sachs and UBS advised Vodafone.