Alltel To Acquire Western Wireless, Creating Fifth Largest Carrier

Alltel, based in Little Rock, Ark., said the purchase would add 1.4 million wireless subscribers in 19 Western and Midwestern states, boosting the company's customer base to 10 million in 33 states. In addition, the purchase would add 1.6 million international subscribers in six countries.

Under the deal, each share of Western Wireless stock would be exchanged for .535 shares of Alltel common stock and $9.25 in cash. Western Wireless shareholders would be allowed to receive all-stock or all-cash payments, unless the available cash or shares were insufficient to satisfy the offers tendered. In that case, a proportion of both cash and shares would be granted for each offer tendered.

Alltell plans to issue 60 million shares of stock, pay $1 billion in cash and assume estimated net debt of $1.5 billion. The deal is expected to close by mid-year, pending approval by Western Wireless shareholders and government regulators. The transaction would be accretive to Alltel earnings in 2006. The company expects net present value of operating synergies, interest and tax savings to be $800 million.

"This transaction strengthens ALLTEL's position as the nation's top regional communications company and makes sense financially and strategically," Scott Ford, Alltel president and chief executive, said in a statement.

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Western Wireless, based in Bellevue, Wash., is a rural communications provider that operates retail store in the U.S. under the Western Wireless and Cellular One brand names.

Alltel currently has more than 13 million customers and $8 billion in annual revenues. The company provides wireless, local and long-distance telephone services and Internet and high-speed data services to residential and business customers in 26 U.S. states.