The next chapter in wireless consolidation being written.
Alltel Buying Western Wireless for $4.4B
Monday January 10, 7:30 am ET
By Chuck Bartels, Associated Press Writer
Alltel Is Buying Rival Western Wireless for About $4.4 Billion in Cash and Stock
LITTLE ROCK, Ark. (AP) -- 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.
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.
"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.
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