Verizon Wireless to Purchase Alltel from Private Equity Consortium

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Verizon Wireless to Purchase Alltel from Private Equity Consortium

8:30 pm on June 6, 2008 | Category: Business, Telecom Services, Wireless, Corporate

Verizon Wireless, will soon overtake rival, AT&T as America’s largest cell phone provider, once it completes its proposed acquisition of Alltel Corp.

Verizon announced yesterday that it would purchase Alltel, a regional player with some 13 million subscribers in 34 states, in a deal worth $28.1 billion, including the assumption of $22 billion in debt. The acquisition will create a massive megacarrier serving more than 80 million customers.

“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,” said Verizon Wireless president and CEO, Lowell McAdam.

The deal represents one of the quickest corporate flips in U.S. history, as the consortium of private equity investors that took Alltel private last fall resells the company at a net capital gain of about half a billion dollars.

The acquisition of Alltel may run into some antitrust trouble with the federal government, due to the overlapping spectrum assets of the two companies. But even if the combined company is forced to sell some of its airwaves, Verizon is confident that the transaction will be completed by the end of this year.