Verizon to buy Alltel for $28.1 Billion

[Shockwave13]

Verizon in talks to buy Alltel: CNBC | Deals | Mergers & Acquisitions | Reuters

Maybe more rumors but its online so.

[zdoyle35]

Verizon in Talks to Buy Alltel for $27 Billion
Topics: Private Equity | Stock Market | Mergers & Acquisitions | Wireless Communications | Technology
Sectors:Telecommunications | Technology
Companies:Alltel Corp | Verizon CommunicationsBy David Faber, CNBC Anchor and Reporter | 04 Jun 2008 | 02:51 PM ET Font size: Verizon is deep in talks to acquire Alltel, the nation's fifth largest wireless carrier, for roughly $27 billion, people close to the talks have told CNBC.


Don Ryan / AP
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Alltel was only recently taken private by TPG and Goldman Sachs Capital Partners in a $27.5 billion deal. That deal, announced in May of last year, closed in November.

Verizon Verizon Communications IncVZ
36.81 -0.55 -1.47%% NYSE


Quote | Chart | News | Profile
[VZ 36.81 -0.55 (-1.47%%) ] seems likely to pay no more than did TPG and Goldman, and will be doing so for a company that has increased its earnings before interest, taxes, depreciation and amortization (Ebitda) by 10 percent since the leveraged buyout was announced last may.

Verizon is expected to pay roughly 8 times Alltel's current Ebitda, in contrast to the 9.2 times Ebitda that TPG and Goldman paid last year when they put in roughly $4.6 billion of equity and lined up $23.8 billion of debt financing to get the deal done.

Officials at Verizon and Alltel declined all comment.

Verizon has long been looked at as the ultimate purchaser of Alltel, but failed to bid when the company was auctioned in the spring of 2007. According to people involved in that auction, Verizon believed Alltel's valuation was too high.

Of course, that was a far different time in the credit markets, when financial buyers were routinely outbidding strategic buyers despite the cost savings and revenue synergies available to the strategic buyers.

One year later, Verizon stands ready to take advantage of those cost advantages with this expected purchase.

Alltel's network is contiguous with Verizon's own and will allow the carrier to save the roaming charges it pays Alltel.


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The addition of the network to Verizon is also expected to bring significant cost advantages in other areas.

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.

While the premium for the equity may be slight, given the enormous leverage in the deal, the returns would seem to be good ones for TPG and Goldman.

Verizon's wireless unit is a dominant carrier in the United States and contributes the vast bulk of the company's cash flow.

© 2008 CNBC.com

[zdoyle35]

I hope we dont lose my circle other wise this would be a good thing

[Alienware_51]

I know it's not official yet, but I have a funny feeling Alltel with be Verizon Wireless at this time next year.....

[JFB]

Verizon in Talks to Buy Alltel for $27 Billion

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[Quint101]

I'm having a hard time believing the the government will outright okay this alleged deal... I think that there will be some conditions put on this if it gets okayed. I wouldn't mind if they gobbled up AllTel in Florida... Better data coverage for me!

[AnthroMatt]

I don't see this deal having any less chance of approval than the Cingular/AWS merger.

Obviously some assets will need to be divested, but I don't think they would be asked to give up much since Alltel's areas of strength generally correspond to VZW's weakest areas.

This deal could really hurt Sprint though. Alltel is Sprint's #1 roaming partner, and I suspect an Alltel/VZW merged company would jack up the romaing rates they charge to Sprint. If Alltel and VZW merge, this might force Sprint and USCC to get together in some fashion.

[walkguru]

Wirelessly posted (Walkguru's: Opera/9.50 (J2ME/MIDP; Opera Mini/4.1.11328/514; U; en))

hmmm my sprint phone roams on altell so i can think wow this is one way to come to okc.

[walkguru]

Wirelessly posted (Walkguru's: Opera/9.50 (J2ME/MIDP; Opera Mini/4.1.11328/514; U; en))

wow hard to believe.

[cellular_freak]

This would be a great merger, because it would place Verizon as the number one carrier in the country and those two networks combined would create a HUGE nationwide network with great call quality is most places.

However, it'll be interesting to see what'll happen in places where both Verizon and Alltel operate the in the cellular band in certain areas. There's a few places here in Michigan where that happens.

I also hope the FCC approves the RCC merger soon too. I'd really like to see Verizon take out Thumb Cellular while they're at taking Alltel out!

[AnthroMatt]

Originally Posted by cellular_freak

However, it'll be interesting to see what'll happen in places where both Verizon and Alltel operate the in the cellular band in certain areas. There's a few places here in Michigan where that happens.

The same "problem" exists in nearly all of Montana, North Dakota, South Dakota, Colorado, Utah, Nevada, Arizona, and portions of California and Minnesota.

[Sailorcancer]

IF this go through. Would vzw get all of alltels phones? Wouldn't mind the Glimmer.

[foufymaus]

Oh Gawd! I hope not, Verizon cripples their phones with their UI's and their customer service sucks

[racquetballer]

Major news media is reporting VZW in talks to buy Alltel. Follow the URL s to the articles.

Verizon in talks to buy Alltel for about $27 billion: source | Deals | Mergers & Acquisitions | Reuters

Alltel Takeover: Verizon in Talks to Buy Alltel for $27 Billion - Telecom Mobile * Technology * News * Story - MSNBC.com

[Mobile Mike]

Interesting, but I'll believe it when I see it. We've been down this speculative road before.

Originally Posted by foufymaus

Oh Gawd! I hope not, Verizon cripples their phones with their UI's and their customer service sucks

Speak for yourself. Customer service experiences are different for everybody. I haven't had any problems with them in a decade and a half.

[AnthroMatt]

Originally Posted by Mobile Mike

Interesting, but I'll believe it when I see it. We've been down this speculative road before.

Agreed, but this one seems to have more teeth for some reason. The fact that it seems talks have already taken place, coupled with the fact that a merger-friendly administration is in it's final 7 months make me think that there might be urgency to get things done.

[ndtoddman]

In terms of area likely needed to be divested...it would be significant. Nearly all of the former Western Wireless properties would likely be up for grabs. Maybe John Stanton will start-up Western Wireless again...hmm.

[Mobile Mike]

Originally Posted by AnthroMatt

Agreed, but this one seems to have more teeth for some reason. The fact that it seems talks have already taken place, coupled with the fact that a merger-friendly administration is in it's final 7 months make me think that there might be urgency to get things done.

I agree with you, Matt., but until an official announcement is made, I'll just see it as speculation. This is just me, though.

[KyleAndMelissa22]

Alltel & Verizon are all over the Carolinas,
(Alltel is not in WNC) (and VZW is not in parts of the Pee Dee in SC, NW of Florence).

And Alltel & Verizon overlap in about 70 - 90 % of SC & NC.

IMO, Verizon lost out on Alltel when TPG & GS purchased them.
Plus I've heard that TPG & GS would continue to expand Alltel.
Alltel is now privately owned, so if Verizon does want Alltel, they'd have to go through TPG & GS.
(Which I don't think they'll give it up, as they already payed alot of money for Alltel.)
(TPG & GS are investment banks, so they wouldn't let go their nearly $30 billion investment.)

Surely if VZW did buy Alltel, we'd get to keep our phones. I never want to give up my LG AX4270.
Also, MyCircle should be grandfathered for current Alltel customers.
(if not then its a violation of contract on the carrier's side).