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Verizon to buy Alltel for $28.1 Billion

Discussion in 'Wireless News' started by Shockwave13, Jun 4, 2008.

  1. Shockwave13

    Shockwave13 Junior Member
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  2. zdoyle35

    zdoyle35 Junior Member
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    Re: Verizon in Talks with Alltel?

    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
    --------------------------------------------------------------------------------

    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
     
    #2 zdoyle35, Jun 4, 2008
    Last edited by a moderator: Jun 5, 2008
  3. zdoyle35

    zdoyle35 Junior Member
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    Re: Verizon in Talks with Alltel?

    I hope we dont lose my circle other wise this would be a good thing:D
     
  4. TWX

    TWX Mobile Enthusiast
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    Re: Verizon in Talks with Alltel?

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

    JFB Gold Senior Member
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    Verizon in talks to buy ALLTEL

    Verizon in Talks to Buy Alltel for $27 Billion

    Story from CNBC

    Story from NYTIMES

    Story from Marketwatch

    Story from RCRNEWS
     
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    #5 JFB, Jun 4, 2008
    Last edited: Jun 4, 2008
  6. QLR

    QLR RIP Note!
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    Re: Verizon in talks to buy ALLTEL

    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!
     
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  7. AnthroMatt

    AnthroMatt Big Meanie
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    Re: Verizon in talks to buy ALLTEL

    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.
     
  8. walkguru

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

    walkguru Wireless Guru
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    wow hard to believe.
     
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  10. cellular_freak

    cellular_freak Senior Member
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    Re: Verizon in talks to buy ALLTEL

    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!
     
  11. AnthroMatt

    AnthroMatt Big Meanie
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    Re: Verizon in talks to buy ALLTEL

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

    Sailorcancer Member
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    Re: Verizon in talks to buy ALLTEL

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

    foufymaus Junior Member
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    Re: Verizon in talks to buy ALLTEL

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

    racquetballer Junior Member
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  15. M in LA

    M in LA Mobile 28 Years Plus
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    Re: Verizon in talks to buy ALLTEL

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

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

    AnthroMatt Big Meanie
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    Re: Verizon in talks to buy ALLTEL

    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.
     
  17. ndtoddman

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    Re: Verizon in talks to buy ALLTEL

    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.
     
  18. M in LA

    M in LA Mobile 28 Years Plus
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    Re: Verizon in talks to buy ALLTEL

    I agree with you, Matt., but until an official announcement is made, I'll just see it as speculation. This is just me, though. :)
     
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  19. KyleAndMelissa22

    KyleAndMelissa22 Woot Woot, Splat !!!
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    Re: Verizon in talks to buy ALLTEL

    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).
     
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  20. RJB

    RJB Gold Senior Member
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    Re: Verizon in talks to buy ALLTEL

    Well I really think that if this happened then they would have to give up one or the other. Just like when ATT bought Cingular there were areas that they had to give up either the a or b side of the 850 band. But lets not forget most of Florida where ATT has the a and b side of the 850 I dont know and why they got away with this.
     
  21. QLR

    QLR RIP Note!
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    Re: Verizon in talks to buy ALLTEL

    True... There are still lots of areas where AllTel and Verizon own both 850 licenses. In the rural parts of South Georgia, for instance, they're the only providers of wireless service as well. In some areas, this will fly, but in many others, the Feds and/or the states will intervene somehow.

    Maybe this will be irrelevant if the carriers start to buildout their AWS spectrum.... ?
     
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  22. RJB

    RJB Gold Senior Member
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    Re: Verizon in talks to buy ALLTEL

    To be honest I am not sure what will happen and honestly I dont want to think about it. It will be a big mess to get this all sorted out and whatnot. Although at least it is the same techlolgy.
     
  23. QLR

    QLR RIP Note!
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    Re: Verizon in talks to buy ALLTEL

    Lol... If this goes thru, at least this won't turn out like the Sprint Nextel debacle. If this is true, things will get a whole lot better for me in terms of coverage.
     
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  24. cellular_freak

    cellular_freak Senior Member
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    Re: Verizon in talks to buy ALLTEL

    Oh Yeah! With the combination of Verizon's and Alltel's networks, you can't go wrong! Verizon just needs to open their handsets up more and possibly offer better pricing on plans, and they would seriously be the best carrier ever!
     
  25. UFO

    UFO Bronze Senior Member
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    Re: Verizon in talks to buy ALLTEL

    This would be horrible for everybody.

    For alltel customers, just look at what happened when alltel sold the Connecticut network to Verizon, those customers lost My Circle. I know if that's gone, I'd have to get a lot more anytime minutes. I'd be waiting for the end of my contract to sign up with Sprint or T-Mobile.

    For Sprint fans, this will be another huge blow as they can look for their roaming rates to take a significant hike. If not immediately, when the current alltel/Sprint deal expires. Sprint will be Verizons' only real CDMA competition and roaming option. Once Sprint has to start really restricting roaming because of this, it'll be another step down for them.

    For all customers, this is a huge step toward the end of competition in the wireless industry, so there wouldn't be any chance of better plans. There will have to be a ton of divestures as alltel and Verizon are the only cellular carriers in a ton of places and even several metro areas, and the only carriers period in many places also. And it will be huge headache with customers here staying with Verizon, and customers there being divested to At&t. Sprint and T-Mobile don't really even to be in a position to benefit from cellular band divestures. I really hope they don't pull the trigger on this deal.
     
  26. KyleAndMelissa22

    KyleAndMelissa22 Woot Woot, Splat !!!
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    Re: Verizon in talks to buy ALLTEL

    I seriously don't think TPG & GS would give up their investment....

    I look forward to staying with Alltel & My Circle, for many years to come....

    Look at SunCom, they got to keep UnPlan, since T-Mobile bought them...
     
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  27. shango

    shango Junior Member
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    Re: Verizon in talks to buy ALLTEL

    We already have Verizon in this area, so the spectrum would be divested and I would become a customer of company X. It would most likely be att. Lots of people would be in that situation.:mad:
     
  28. T Sizzles

    T Sizzles Senior Member
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    Re: Verizon in talks to buy ALLTEL

    Alltel is doing very well right now....... I don't see why the investment group would give them up.
     
  29. RadioFoneGuy

    RadioFoneGuy Powered by HTC FUZE
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    Re: Verizon in talks to buy ALLTEL

    Look at the speculated buy out price, it is basically a slap in the face of the investment firms. You also have to think of all the legal fees they incured to make the deal.

    There would be so much divestment alot of customers would get shifted to other carriers.

    Alltel and Verizon both have respectable networks minus Verizons Nazi like handicaping of their phones but in the end the combined Network would be phenominal.

    I think after the Dobson and the highly debated RCC buyout the FCC is looking closer at these buyouts of the Mega Rural providers.

    IMO I hope it dont go thru.
     
  30. T Sizzles

    T Sizzles Senior Member
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    Re: Verizon in talks to buy ALLTEL

    I don't see it going through. Not only would there be loads of divestments, but it would make Verizon the sole provider in some markets. Verizon would have a chokehold on Sprint's roaming, since Alltel is Sprint's primary partner.
     

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