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Verizon snaps up Alltel for $28.1B
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The rumors are true. Verizon Wireless announced this morning that it will purchase Alltel Corp. in a cash merger valued at $28.1 billion. The deal, which is with Alltel Corp. and Atlantis Holdings (an affiliate of private investment firm TPG Capital and GS Capital Partners), is structured so that Verizon 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.
The merger is expected to close by year-end and is subject to regulatory approvals. This will make Verizon Wireless the No. 1 wireless operator in the U.S. with nearly 80 million subscribers. Verizon currently has more than 65.7 million customers while Alltel has about 13.2 million subscribers in 34 states. AT&T will move to the No. 2 position with about 71.4 million customers.
The deal makes sense in many ways. Alltel has been a long-time roaming partner for Verizon and it currently operates in 57 markets that Verizon does not serve. And there are more similarities: Like Verizon, Alltel is a CDMA carrier using the Qualcomm's BREW platform for content delivery. Alltel also has recently announced plans to migrate to the LTE technology for its 4G path, a move that Verizon has also said it will make.
Alltel President and CEO Scott Ford will continue in his current position as head of Alltel until the merger is completed.
Verizon says that after integration costs it expects to realize synergies of more than $9 billion from reduced capital and operating expense savings.
In a research note, Matt Thornton, analyst with Avian Securities said that while the deal will temporarily benefit LG and Nokia because it will mean that LG, which has a dominant presence with Verizon, will now be able to extend into Alltel territories. Nokia, which is expected to release two or three new CDMA devices for Verizon later this year may also see benefits from this merger.
For more:
-See this release
Related stories:
Verizon in talks to buy Alltel
Private equity firms snag Alltel for $27.5B
Rumor Mill: Verizon Wireless to acquire Alltel
Comments
Posted by Anonymous | November 5, 2008 - 7:28pm
When will this be effective? I live in an area
that Alltel works quite well and we have Verizon. I am excited about the purchase because now I can get service on Verizon where only Alltell would work. I am wanting to know if the transition will be effective by year's end. We are planning on buying a Blackberry Storm and want to know if we will get service in Salida Colorado and on top of Monarch Mountain.
Awaiting word on when this will be effective before we make any changes.
Posted by Anonymous | January 8, 2009 - 10:52pm
when will this happen?
i am an alltek customer already and i was about to switch over to cingular to get the iphone. but i had changed my mind. BUT! i heard that alltel was BUYING OUT VERIZON.?! which one is true? and does this mean they will have mor selections of phones to choose from. will it still alltel?
people really need to know when this is going to go into affect. there are so many questions out there that are un-answered. i would really like to know. will i still have service? because we all know that alltel has the best service in the whole entire world. but yeah will i still have the same amount of service, the same plan? because i know if this screws up my stuff i am DEFFINATELY switching to cingular. that why i would love to know when this will take place?
Posted by Anonymous | March 31, 2009 - 9:37pm
Verizon has bought Alltel. Most markets will see the billing switch by September 2009. I don't think things can get much worse than they already are with Alltel. If you call Alltel's customer service since the merger, you will receive very poor service and alot of outsourced Indian representatives. I even had a customer service manager admit to me that their service is lacking due to employee morale and fear of losing their job. Alltel was a great company until this merger. I can't wait to switch to Verizon. They even made a version of My Circle with the 10 numbers.
Posted by WilliamC | June 24, 2009 - 12:40pm
It's gonna be the biggest mess and headache if Verizon only gets it. What happens if 2 or 4 million suscribers leave AT&T for Verizon??? We hear about all the headaches from AT&T and the Blackberry outages too. The only way this is gonna work is by letting any carrier whose specifications meets the Iphones specs be allowed to offer this phone. The more suscribers Verizon adds - will strain their network, increase costs and consumer cell phone bills will be higher. Someone has to pay for the increased network capacity and bandwith plus associate costs.
Posted by Sylvia | November 21, 2009 - 8:22pm
so as an Alltel customer, will I be able to keep my calling plan once I am with Verizon?
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