Verizon looking to buy Alltel
Posted by Joe P on June 5, 2008
Update @ 10:38 a.m. EDT: It’s official. Well, not official official. It still has to pass through various bodies, including the FCC and, considering the size of the deal, through the Department of Justice. We’ll keep up with any further detail surrounding this.
Remember when people hoped we’d get another national carrier out of the 700 MHz auction? That didn’t go so well. Now, a few months after the auction, it looks like we might be losing a carrier, though it’s not really a national one. News has spread that Verizon is “deep in talks” to purchase Alltel for about $27 billion. This is around the amount that TPG and Goldman Sachs Capital Partners purchased Alltel for last year. So now the nation’s Nos. 2 and 5 carriers could become the nation’s No. 1 carrier.
The two companies already have a roaming agreement, so Verizon stands to save some money right off the bat. Since no one from either company would comment on the story, it’s unclear whether Verizon would retain the Alltel brand, which is popular in some portions of the country, or simply assimilate it.
So why are Alltel’s owners so willing to sell less than a year after they finalized the purchase?
Sources told CNBC that the sponsors are willing to sell only six months after they closed the deal because they’ll get a slight premium to their equity investment, and there is a broad desire within private equity these days to generate a return when one is available.
Vodafone, which owns a 45 percent stake in Verizon Wireless, has confirmed the talks. Comparing this to past occurrences, it seems that this deal will get done.
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Filed under : Verizon Wireless
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[...] may want to subscribe to my RSS feed. Thanks for visiting!The industry is currently abuzz with the Verizon/Alltel deal, and it seems that on the financial end, most people are praising the deal. However, as with most [...]
[...] month, we’ve seen two mergers in the wireless world. First came Verizon and Alltel, with the former acquiring the latter for roughly $27 billion. Late last week, we saw another, with Virgin Mobile purchasing Helio in a [...]
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