Published:
09-Jun-08
Verizon Wireless entered an agreement to acquire privately held Alltel in a cash merger deal worth $28.1bn ($5.9 equity and $22.2 projected net debt). In May 2007, Alltel was sold to private equity firms, TPG Capital and GS Capital Partners for $27.5bn. Verizon Wireless is a joint venture by Verizon Communications and Vodafone Group, owning 55 and 45 per cent of the company respectively.
Our take...
Alltel currently claims over 13.2 million subscribers. The deal should propel the newly-formed entity to over 84 million subscribers by the end of 2008, bringing it ahead of current market leader AT&T (78 million subscriptions by year's end). This merger is unlikely to be the last in a period of consolidation in the mobile industry, as operators actively seek economies of scale in established markets and subscriber growth opportunities in emerging markets. In the USA, smaller, rural operators are likely acquisition targets for the four major operators (AT&T, Verizon, Sprint and T-Mobile).
USA,
