Verizon Wireless buys Alltel for $5.9 billion

Verizon Wireless buys Alltel for $5.9 billion

By Trevor Anderson
 January 9, 2009

Can you hear me now, Chad?

Verizon Wireless announced Friday it closed a $5.9 billion deal to acquire Alltel Corp. from Atlantis Holdings LLC.

Baskin Ridge, N.J.-based Verizon said in a news release the merger will expand its network coverage to about 290 million people, making it the largest cellular phone company in the world.

Verizon will absorb Alltel's $22 billion debt and will continue to use the Alltel brand name and operate its retail stores for the next several months while the transition is under way.

"It's a very exciting day for us," Karen Schultz, Verizon's public relations manager for its Carolinas/Tennessee Region, said in a phone interview. "We're thrilled to welcome our new team members and customers. It's going to be an exciting year for everyone."

She said as a regulatory condition of the purchase, Verizon must sell 105 overlapping markets in 24 states.

A majority of the markets sold will be from Alltel, and Verizon will divest in four markets it held before the buyout. It also plans to sell Unicel operations it owns in Minnesota and Kansas.

Verizon said it will pick up Alltel's 12.9 million customers and will have 83.7 million total customers after the divestiture.

Alltel markets covering Cherokee and Union counties were listed among those that will not be retained by Verizon.

"As a part of the regulatory requirements of the purchase, Alltel customers in those areas will not become Verizon customers," Schultz said.

She said Verizon will eventually re-brand Alltel operations in the retained markets in phases, beginning in the second quarter and continuing through the third quarter of 2009, as billing conversions are completed throughout the country.

Schultz also said Alltel customers in markets that will be retained should receive a letter within the next few weeks informing them of the purchase and of new services that will be available to them when they transition to Verizon Wireless.

"Alltel customers don't need to take any action at this time," Schulz said. "Most will be able to keep their same handsets, as Verizon and Alltel are on the same system."

Verizon said it will retain all Alltel employees below the executive level as the company assesses positions that need to be cut or be kept under the new arrangement.

The company said it expects to gain more than $9 billion in aggregate capital and operating expense savings as a result of the acquisition.