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June 5, 2008

According to various sources cited by The Wall Street Journal, Verizon Wireless is reportedly negotiating to acquire its rival Alltel Corp.

If the transaction goes through, it could create the largest wireless carrier in the United States.

The potential deal could be worth $27 billion, and the discussions involve multiple financiers, including private equity firm TPG Capital and the same group of banks which supported Alltel's $27.5 billion buyout in 2007.

As usual in such important deals, the Department of Justice and the Federal Communications Commission would need to approve any merger between the two companies.

However, combining Alltel with Verizon Wireless would create an 80-million-subscriber wireless telecom giant that could seriously challenge the dominance of AT&T.

Alltel currently has a subscriber base of about 13.2 million people in the South and Midwest.

In comparison, AT&T reported 71.4 million subscribers last quarter.

Goldman Sachs, Citigroup, Barclays PLC and Royal Bank of Scotland still hold more than $24 billion in outstanding loans and bonds over Alltel.

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Source: The Wall Street Journal.