Verizon Wireless purchase of Alltel official
Following the statement from Vodafone confirming there was a "potential acquisition" on the table, it seems the Verizon/Alltel deal has now been done.
Barrons is reporting that Verizon Wireless, a joint venture owned by Verizon and Vodafone, has reached an agreement to buy Alltel from TPG Capital and Goldman Sachs Capital Partners for $5.9 billion plus the assumption of $22.2 billion in debt, for a total value of $28.1 billion.
This will mean the Verizon/Alltel team-up will overtake AT&T as the largest wireless company in the States, and Verizon has predicted "synergies" will generate cost savings of $1 billion in the second year after the deal closing.
Commenting on the transaction, Arun Sarin, CEO of Vodafone, said: "We expect the acquisition of Alltel to significantly increase the value of our 45% interest in Verizon Wireless through the realisation of substantial in-market synergies and to reinforce its leading position in the world's largest mobile market by revenues".
"Whilst Verizon Wireless' free cash flows will initially be deployed in reducing net debt, the Verizon Wireless Board has agreed to conduct an annual dividend review process and to the payment of enhanced tax distributions."
The companies expect the deal to close by year end. Both Verizon's and Vodafone's shares have risen on the news.