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June 5, 2008

Verizon has confirmed it is acquiring all the outstanding shares of its rival wireless carrier Alltel.

The deal was completed this morning by a private equity group led by TPG and Goldman Sachs for $28.1 billion.

Verizon said it expects the acquisition will add 13 million customers in 34 states to Verizon’s 67 million-user base.

The acquisition will close by year-end.

The deal stands to vault the company’s Verizon Wireless ahead of rival to AT&T, which is the nation’s leading wireless carrier right now with 71 million users.

Verizon said it expects the deal to add to earnings immediately, excluding transaction costs.

Verizon chief Ivan Seidenberg said “this 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.”

He added “Verizon Wireless’ acquisition of Alltel clearly provides opportunities for enhanced value for Verizon shareholders.”

Verizon will pay $5.9 billion for Alltel’s equity and assume $22 billion in debt in a deal that comes less than a year after the private equity firms closed their purchase of Alltel.

That debt comes on top of Verizon’s already substantial debt load of $37 billion or so - an irony in a deal that was driven partly by the desire of the private equity group’s bankers to shed their buyout liabilities.

But for now investors are focusing on the growth opportunity, sending Verizon shares up 3 percent in early trading Thursday.

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Source: Verizon Wireless.