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Alltel Buying Western Wireless for $4.4B

Discussion in 'Alltel Forum' started by ComicalMoodyDan, Jan 10, 2005.

  1. ComicalMoodyDan

    ComicalMoodyDan Gold Senior Member
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    Alltel Buying Western Wireless for $4.4B
    By CHUCK BARTELS, Associated Press Writer

    LITTLE ROCK, Ark. - Alltel Corp., the sixth biggest U.S. cellular carrier, has agreed to buy Western Wireless Corp., a Northwest regional carrier which owns the Cellular One brand, for about $4.4 billion in cash and stock.

    The deal, announced Monday, would make Alltel the No. 5 U.S. wireless carrier with about $10 billion in overall revenue and coverage of a vast share of the rural United States with 10 million wireless customers in 33 states.

    The deal would boost Alltel's reach by about 1.4 million U.S. wireless customers in 19 western and midwestern states that are contiguous to Alltel's existing properties which are chiefly in the South and West.

    Also included would be 1.6 million customers in six foreign countries. Western's international operation is based mainly in Austria and Ireland.

    Alltel is also assuming about $1.5 billion in debt in the deal, which is subject to approval by Western Wireless shareholders and regulators.

    The deal marks the latest consolidation in the wireless phone service industry where prices are constantly dropping.

    Last month, Sprint Corp. agreed to buy Nextel Communications Inc., the fifth biggest U.S. wireless provider, for $35 billion in a deal that would fortify Sprint's position as the nation's third largest wireless service provider behind Cingular Wireless and Verizon Wireless.

    A Sprint-Nextel combination would have 35 million wireless subscribers and a combined $40 billion in annual revenue.

    Alltel said it would issue 60 million shares, which were worth about $3.4 billion at Friday's closing price, and pay $1 billion in cash for Western Wireless' shares under terms of the deal.

    Alltel, based in Little Rock, will exchange 0.535 shares of Alltel stock plus $9.25 in cash for each Western share. Western shareholders will have an option for all cash or all stock.

    In early trading Monday, Western Wireless shares rose 86 cents, or 2.4 percent, to $37.38 on the Nasdaq Stock Market, while Alltel shares were down $1.52, or 2.7 percent, to $54.60 on the New York Stock Exchange (news - web sites).

    "This transaction strengthens Alltel's position as the nation's top regional communications company and makes sense financially and strategically," Alltel president and chief executive Scott Ford said in a news release. "This transaction is in keeping with Alltel's efforts to maintain our financial discipline while adding wireless properties that contribute to our long-term growth."

    Western chairman and chief executive John W. Stanton noted the cellular industry is consolidating and said the sale to Alltel creates a company with a unique reach.

    "The combination of Western Wireless with Alltel creates a rural operator using multiple technologies with the largest footprint in the country," Stanton said. Stanton will have a seat on the Alltel board, Ford said.

    Alltel said the deal would give it coverage over one-fourth of the United States' population and half the land mass of the continental 48 states. Alltel also said the deal will make it "a leading independent regional roaming partner" for the four top wireless carriers.

    The transaction adds California, Idaho, Minnesota, Montana, Nevada, North Dakota, South Dakota, Utah and Wyoming as new states under Alltel's service area. The deal expands Alltel's number of customers in Arizona, Colorado, New Mexico and Texas.

    Alltel Buying Western Wireless for $4.4B
     
  2. azcellphonejunkie

    azcellphonejunkie The Cell Phone Junkie
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    I just talked to an employee of Alltel and he is very excited about this! It's amazing how the rumors can go from one week being Verizon buying Alltel to this. I think this is going to be good for both companies!
     
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  3. ComicalMoodyDan

    ComicalMoodyDan Gold Senior Member
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  4. Gamer03

    Gamer03 Technology Aficionado
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    Now it looks like Alltel is starting to get into the game....competition is always good. :D

    How many customers does Western Wireless have?
     
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  5. azcellphonejunkie

    azcellphonejunkie The Cell Phone Junkie
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    Interesting that people from different areas of the country look at Alltel differently. Here, Alltel is the A side cellular provider and have always been one to recon with. They have great coverage throughout the state and many think they do better than Verizon here. I had them for about 6 months and had great service with them. My V60 performed well, but I did have dropped calls when driving long distances. I guess this is the way it works though. On the drive from Phoenix to Tucson, I have used Alltel, T-Mobile and Sprint, and all of them have poor areas along this stretch...
     
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  6. kjmattson

    kjmattson Junior Member
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    I hear ya. For most of Michigan, Alltel is king. But a lot of people from the Detroit area don't even know that Alltel exists.
     
  7. ComicalMoodyDan

    ComicalMoodyDan Gold Senior Member
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    Check out this new map that I found of ALLTEL's/Western Wireless combined spectrum.

    [​IMG]
     
  8. azcellphonejunkie

    azcellphonejunkie The Cell Phone Junkie
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    Very cool, thanks for posting this map!
     
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  9. RJB

    RJB Gold Senior Member
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    Looks like they would still have alot of ground to cover in the us before they could become one of the top contendors. But only time will tell.
     

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