Verizon Wireless announced today that it will buy all of Alltel’s assets for an aggregate value of $28.1 billion. At the time of the agreement the bulk of that amount -- $22.2 billion -- will pay off Alltel debit and the remaining $5.9 billion is the value of Alltel’s equity.
Verizon Wireless said in a press release that it expects the deal to be completed by the end of 2008, but it points out that the deal is subject to regulatory approvals. Alltel and Verizon’s networks operate on common network technology making the transfer of Alltel customers to Verizon networks seamless.
Verizon points out that the purchase of Alltel will give it access to 57 new and primarily rural markets that Verizon Wireless doesn’t currently serve. Alltel currently has more than 13 million customers in markets across 34 states.
Verizon CEO and board chairman Ivan Seidenberg said in a statement, “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. Verizon Wireless' acquisition of Alltel clearly provides opportunities for enhanced value for Verizon shareholders."
Verizon Wireless says that the acquisition will offer Alltel customers a much larger IN Network calling community and will allow Alltel customers access to a downloadable library of 3 million songs. Alltel customers will also get Verizon Wireless consumer policies like Test Drive and Worry Free Guarantee.
Verizon and Alltel aren’t the first big names to merge in the cellular services market. AT&T and Cingular merged in a deal costing AT&T $86 billion in 2007.
