Verizon Wireless to acquire Alltel for $28.1 billion

Verizon Wireless announced Thursday morning it will acquire Alltel Corporation, a deal that effectively creates the nation's largest mobile operator. Per terms of the deal, 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. The acquisition follows just seven months after Alltel was sold to TPG Capital and a unit of Goldman Sachs Group in a $27.5 billion leveraged buyout, and if approved by regulators, it heralds the most significant U.S. telecom deal since AT&T acquired BellSouth in 2006.

Alltel is the fifth largest mobile operator in the U.S., with 13.2 million subscribers in 34 states--added to Verizon's 67.2 million existing subscribers, the combined company would vault past current market leader AT&T, which boasts 71.4 million customers. In order for the deal to pass regulatory muster, Verizon will likely be required to divest some regional assets in areas where its coverage overlaps significantly with Alltel or where both operators are prime players, according to The Wall Street Journal. The Department of Justice and the Federal Communications Commission would also have to give their blessing. Most important, a successful Verizon/Alltel merger would mean an end to Alltel's painfully annoying "Wizard" television commercials.

For more on the Verizon/Alltel deal:
-read this Wall Street Journal article [1]

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