Verizon Wireless Acquires Alltel for $28.1 Billion
Verizon Wireless today entered an agreement with Alltel Corporation in which they will acquire the company for $28.1 billion in a cash merger. According to the terms of the agreement Verizon Wireless will acquire the equity of Alltel for $5.9 billion. Alltel's projected debt of $22.2 billion brings the transaction to $28.1 billion.
The merger is targeted for completion by the end of the year and once the transaction closes, customers of both companies will gain access to a broader range of products and services. The 13+ million Alltel customers will benefit from advanced services such as over the air music downloads, coast-to-coast coverage and consumer policies such as Worry Free Guarantee and Test Drive. The merger will also put Alltel's 57 primarily rural markets on the path to fourth generation Long Term Evolution (LTE) technology, which Verizon Wireless will be deploying throughout its network over the next few years. Alltel customers will also benefit from VW's Open Development initiative which welcomes third party devices and services to use the Verizon Wireless network.
According to Verizon Wireless president and CEO, Lowell McAdam, "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." The majority owner of Verizon Wireless, Verizon Communications' CEO Ivan Seidenberg added that the merger "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.” Alltel CEO Scott Ford, who will remain at his position until the merger is complete, believes "the combination of [the] two companies will continue and improve upon that heritage as, together, we can more quickly deliver an expanded range of innovative products and services to our customers.”
Verizon Wireless expects to realize a net present value, after integration costs, of over $9 billion and incremental cost savings of $1 billion are expected in the second year after closing.
[via Verizon Wireless]
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