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Verizon to snap up Alltel for $27B?

updated 04:30 pm EDT, Wed June 4, 2008

Verizon May Buy Alltel

The American cellular industry may consolidate once again with a potential Verizon buyout of Alltel, CNBC claims. Referring to anonymous sources said to be aware of the deal, the TV news network asserts that Verizon would pay as much as eight times Alltel's pre-interest, pre-tax earnings, or $27 billion, for the acquisition. The deal would be a friendly takeover as Goldman Sachs and TPG, the financial institutions that took Alltel into private holding just last year, are eager to turn a premium no matter how small.


Verizon in turn would make the move as it sees the company's up-front value as low enough to be worth a buy; during an auction in spring of last year, that value was too high, according to the report.

The deal is said to be advantageous to Verizon as it would reduce competition and increase the subscriber base while providing "cost advantages" to the carrier. Alltel's service areas overlap nearly all of Verizon's, while Alltel also has a roaming deal with Verizon that allows its customers to borrow the latter's airspace.

Although unconfirmed by either Alltel or Verizon, a deal would substantially reshape the US mobile landscape by narrowing or even eliminating the lead held by AT&T over Verizon in total subscriber share. It would also temporarily give more support to the largely US-centric CDMA phone network standard, although both Alltel and Verizon have planned to move to LTE for their 4G cellular networks, putting them on the same standard as AT&T when the faster services are widely available in 2010.




by MacNN Staff

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Comments

  1. climacs

    Joined: Dec 1969

    +1

    first thing to do

    kill those retarded f****** TV spots with the wizard and the dweebs and that awful "Come and get your love" theme. I don't want my cell carrier to love me; I want it to provide good coverage and reasonable rates and non-atrocious customer service!!!!

  1. testudo

    Joined: Dec 1969

    +1

    oh good!

    As we know, consolidation is the best way to improve service and cut costs, which will save people $$$! It's win/win!

  1. MeandmyMac

    Joined: Dec 1969

    +3

    maybe...

    the Alltel 'Verizon' dweeb can have a 'Celebrity Death Match' with Verizon's "Can you hear me now" guy to see who wins the spokesman spot for the new combined company?!

  1. Guest

    Joined: Dec 1969

    +1

    uninformed

    This article is weak... Does electronista allow for it's writers to make things up?Alltel has the largest network (geographically) of any carrier in the U.S. and is virtually opposite of Verizon's, with very little overlap. In addition it would put Verizon well in the lead for subscribers by nearly 10 million over AT

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