As first rumored yesterday, Verizon (NYSE: VZ) is acquiring Alltel (NYSE: AT) equity and debt in a transaction worth $28.1 billion. Release.
Verizon Wireless issued a press release just moments ago, detailing the transaction between itself and it’s minority owner Vodafone (NYSE: VOD) and Alltel, which once completed will make it the largest U.S. wireless operator. Verizon will purchase Alltel from private-equity partners TPG Capital and GS Capital Partners, for about $5.9 billion in cash and will assume Alltel’s debt, which is estimated to be $22.2 billion, making the total transaction value $28.1 billion. The deal is expected to close by the end of the year, pending regulatory approvals. Rumors of the merger cropped up yesterday, however, the timing of the deal is surprising. Alltel was always a potential buy-out candidate for Verizon because they used the same network technology, but why now? One might suspect that Verizon was increasingly resigned to the fact that it was never going to catch-up to AT&T (NYSE: T), which has a runaway hit in selling Apple’s (NSDQ: AAPL) iPhone. Together, Verizon Wireless and Alltel will have 80.2 million subscribers, surpassing AT&T