Following media speculation, Verizon Wireless has announced that it has entered into an agreement to acquire Alltel Wireless in a cash merger. Under the terms of the agreement, Verizon Wireless will acquire the equity of Alltel for approximately $5.9 billion; based on Alltel’s projected net debt at closing of $22.2 billion, the aggregate value of the transaction is $28.1 billion.
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“This move will create an enhanced platform of network coverage, spectrum and customer care to better serve the growing needs of both Alltel and Verizon Wireless customers for reliable basic and advanced broadband wireless services,” Lowell McAdam, Verizon Wireless president and CEO, said in a statement.
Alltel serves more than 13 million customers in markets in 34 states, including 57 primarily rural markets that Verizon Wireless does not serve. Together, the two carriers will boast more than 80 million customers, creating the largest wireless carrier in the country. AT&T, currently the top wireless carrier in the market by subscribers, has 71.4 million customers.
“This is a perfect fit, with Alltel’s high-value post-paid customer base, its solid financials, our common network technology, and significant, readily attainable synergies,” said Ivan Seidenberg, Verizon Communications CEO, in a statement. Verizon Communications owns a majority stake in Verizon Wireless, while Vodafone controls the remainder.
In the statement, Verizon said that Alltel President and CEO Scott Ford will continue on as head of Alltel until the merger is completed.
Alltel and Verizon hope to complete the merger by the end of the year. It’s subject to regulatory approvals, so the deal could hit a snag considering the market is already heavily consolidated.