Verizon "in talks" to buy Alltel for $27 billion
Update: The talks have been confirmed by Vodafone which owns a 45% stake in VZW.
Update: The talks have been confirmed by Vodafone which owns a 45% stake in VZW.
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Reader Comments (Page 1 of 1)
John @ Jun 4th 2008 4:05PM
what if u have an alltel phone right now? would it work str8 up on verizon?
lsouth1 @ Jun 4th 2008 4:15PM
What exactly would Verizon gain besides customers? Does Alltel truly have that much coverage where they don't overlap?
Pete @ Jun 4th 2008 6:04PM
As a Verizon Wireless customer, I would not be in favor of this merger. I'd prefer a better roaming agreement with Alltel (ie EVDO), but not a merger. One less major competitor in this wireless industry would spell even higher prices for consumers and less choice. I hope the DOJ would block any merger of this size...
Dramane @ Jun 4th 2008 4:23PM
wow, this would be a match made in heaven, Verizon will basically take over Alltel network and therefor their roaming agreements with USCC, SPRINT and other CDMA networks out there, dont forget also Alltel has some GSM network that T-Mo and ATT use in rural USA. be a great deal for VZW but wonder if FCC and other regulators will let it fly. Also they will have to divest significant assets to satisfy those FCC and Regulator dudes, Wow can't wait for this to go thru then i am on board with them.
To John: Yeah if you have an Alltel phone they will probably load VZW software in it or give you a free phone to upgrade, both companies run the same network
michael @ Jun 24th 2008 4:24PM
goodbye sprint...
fyreblazer @ Jun 4th 2008 4:53PM
I'm with lsouth, this seems like it's strictly to gain more customers (and of course more money). It will give them the undisputed title of "largest carrier in the us" in terms of coverage area and customers.
My problem would be, Alltel has great ideas in MyCircle, their plans are generous and they've finally started getting cool exclusive phones while VZ not-so-much. What happens to all those positives that make Alltel look like a great carrier and all those negatives that make VZ not look so good.
retro77 @ Jun 4th 2008 5:05PM
They become VZW positives
David @ Jun 4th 2008 5:07PM
Verizon may start getting better phones with this new semi-open network initiative. Also it is possible that VZW gives Altel (or even new and existing customers) some similar "circle" plans... time will tell.
sam @ Jun 4th 2008 5:32PM
great deal for verizon. lousy deal for Alltel users, and probably worse for Sprint users. while sprint and verizon were at war, alltel snuck in under the radar and had great roaming arrangements with both. in some markets, sprint has EVDO and Verizon doesn't. vice versa in others. but alltel users get EVDO on Sprint and Verizon networks. you can kiss those sharing arrangements goodbye once they're sucked into VZW.
JDUBB @ Jun 4th 2008 6:37PM
This sucks, I want sprint to get itself situated and purchase alltel. I really want sprint to get alltel so hopefully this does not go through. If sprint got them it would increase sprint coverage greatly. Sorry am one of the few whom still love sprint.
Zach @ Jun 6th 2008 6:52AM
Sprint is in no position, financially, to purchase another wireless carrier; especially one of Alltel's size.
sam @ Jun 4th 2008 5:41PM
oh, and you can probably kiss my circle goodbye as well. i'm sure they'll have to grandfather existing contracts. but given the choice of squashing it in alltel's market, or spreading to the rest of their national market, I bet VZW squashes it.
LordObento @ Jun 4th 2008 5:52PM
1st order of business..... Fire Chad and the Wiiiizzzaaarrdd.
mstellman @ Jun 4th 2008 6:13PM
I can see Chad right now, "Can you hear me now? Awesome!!!"
Matt S @ Jun 4th 2008 6:24PM
everytime i see news like this, it makes me think verizon is doing everything in their power to slit sprints throat and become #1 in everything. In about about a month vz is lauching PTT over REVA, the employee learning modules are directly aimed at "giving nextel customers a choice". sprint dying by a thousand cuts.
lovechop @ Jun 5th 2008 11:54AM
As a former Verizon customer who paid the ridiculous early termination fees to escape Verizon and moved to Alltel, I would hate this deal! Verizon seems to have no interest in competing with the other carriers when it comes to service. When the MyCircle's and 5Fav lists started popping up with Alltel, TMobile, etc... nothing like that from Verizon. They're only interested in putting out new phones.
I don't know what I'll do if this goes through...
snow7791 @ Jun 4th 2008 6:49PM
i doubt this will happen.. this rumor always pops up every 5 or 6 months plus i dont think evil empire could fork up 35 billion(9 billion for the 700 mhz sale and 27 billion for alltel),
MFfan310 @ Jun 4th 2008 6:48PM
If this merger goes through, Chad will get a "lateral move" to the Test Guy's answerman!
VZW + Alltel = Karma for Chad after annoying millions of TV viewers across America
elgee02 @ Jun 4th 2008 7:25PM
VZW doesn't need this at all. I say don't bother, competition is good.
John @ Jun 4th 2008 8:16PM
Hi, my name is John King, and I am actually a Wireless Consultant for Alltel. I have heard these rumors about Verizon buying us, and just to nip it in the butt right now, at this time, we are not moving a muscle for Verizon.
To the person that asked if Alltel has "that big of a coverage map," we do. To be completely honest, Verizon and Alltel SHARE towers. When the roaming indicator is blinking on the phone, being Alltel or Verizon, it just means that you are picking off of the other company's tower. If the indicator is SOLID, then you would incur roaming charges. So yes, we might not have the biggest customer base, BUT we DO have America's Largest Wireless Network.
Toledo Guy @ Jun 4th 2008 9:33PM
Nothing personal John, but you are simply a cog in a big wheel. As a "Wireless Consultant" you'll be among the last to know when something happens. If your board decides to take the profit and run, there's not a lick you can do to stop it.
As an AT&T customer, I say that the more competition, the better. It keeps price down for all of us. As a former Verizon customer, this will do nothing to bring me back to Verizon when my current contract is up later this year.
MVP @ Jun 5th 2008 6:31PM
Um actually JOHN, im a verizon wireless consultant, and just because you cant face reality that verizon really did buy Alltel for 28billion, which i think is way too much for their crappy service, doesnt mean that alltel is great. Verizon really did buy Alltel, and we actually have Americas Most reliable Network
Workin Man @ Jun 6th 2008 1:05AM
Most hilarious comment ever.
Foot in mouth!
John @ Jun 4th 2008 8:18PM
There is also no way that Sprint will purchase Alltel. Sprint and T-Mobile are the first ones to go.
JDUBB @ Jun 4th 2008 10:06PM
If sprint gets settled down and gets things fixed with the merger from 2005! there is no reason they could not aquire alltel. an alltel sprint merger would be simple if sprint gets there cs fixed, cdma to cdma would be simple unlike the cdma and iDEN mess. Sprint is close to finally fixing it though.
badqat @ Jun 4th 2008 10:31PM
@ JDUBB - You might think that, but you're forgetting that Alltel, like Verizon and AT&T have an upgrade path of LTE. With those three doing LTE, Sprint is going to be the red-headed step child of wireless carriers, what with it's CDMA/iDEN/WiMAX mix. Sprint shows no signs of "fixing" it's issues. And Sprint can't afford Alltel, which is probably the biggest reason they'd never be able to buy them.
@John King - Alltel must be a pretty simple organization if "wireless consultants" are privy to the actions of the board before they happen. Amazing that the WSJ is reporting something that a "wireless consultant" has no clue about...but then, I guess they're not on the "inside" like you are.
eric_wright @ Jun 4th 2008 9:23PM
@ John: First things first.... as a wireless CONSULTANT, you probably don't know what you're talking about when it comes to the merger. And thank you for the exciting lesson on wireless and roaming indicators. IF this happens, nobody in your camp or mine(VZW) is going to know about it until it happens....and you know it. So stop sounding like a know-it-all and talk about something you can back up. Like how Alltel claims the largest network, when they are referred to as a "regional" carrier.
RC @ Jun 4th 2008 9:59PM
I can't see the FCC or DOJ approving this. Verizon has snatched up a couple small rural carriers latley. All this does is eliminate competition and give Verizon some more rural coverage. Plus there would be an endless list of divestments and conditions.
Seth A @ Jun 4th 2008 10:51PM
I think we are missing the biggest question here, what will happen to the advertisements? Do Chad and the Verizon guy suddenly turn gay and together disowning the rest of the group? Ohh, drama.
Humm, makes me wonder seriously though. Will Verizon completely absorb Altell, or take some of there ideas. Adopting the "call any 5 people on any network for free" thing sure would be nice, because I am on AT&T, and they do everything Verizon does. :-)
J @ Jun 4th 2008 11:33PM
Four reasons for this merger:
1. VZW does not operate stores in the rural areas that Alltel owns the spectrum in and it opens up the brand to more subscribers once the stores roll out in Oklahoma, Nebraska, Kansas, etc.
2. Alltel owns landline operations in some markets. This gives VZ more potential subs for FiOS and internet services. To truely make FiOS profitable and keep the landline/tv/internet operations from sinking, the company needs to be able to provide their next gen services in more markets
3. LTE. VZW and Vodafone go to the phone and networking manufacturers wanting equipment to outfit 250 million or more customers giving VZW/VOD significant cost advantages over ATT, T-Mo, O2, Orange, etc which keeps the prices of plans and equipment down for the consumers. That according to both CEOs (McAdam and then Voda CEO Sarin) was the driving force between the two choosing LTE
4. Alltel had their second straight quarter of a million plus net adds. In quite a few markets that Alltel and VZW operate, Alltel has been winning the customer satisfaction race. That and a million retail postpay net adds in Q1 when ATT barely posted that same number got VZW's attention that they can be a player long term and possibly purchase Sprint down the road with the private equity coffers backing them.
Also, VZW may not have the 36 billion for the LTE spectrum and Alltel purchase but Vodafone can surely write the check for their 45% to bring the total financing cost to around 18-20 billion.
MFfan310 @ Jun 5th 2008 10:18AM
Actually, Alltel spun off their landline ops as Windstream Communications a few years back... so Alltel has been a "pure-play" wireless company for quite some time now.
QuickSe7ens @ Jun 5th 2008 12:11AM
I can't help this...but John, as a "Wireless Consultant", that's loosely translated to sales peon. You say you're holding out? Yeah, cool man, too bad you have no idea what the rest of the company that pays your paychecks is doing. As a peon, working out of some small ass store, you have no idea what your company leaders are thinking or doing. Hence, Peon, as opposed to Overlord. Oh, and btw, Largest Wireless Network in America? Right on man, that's why you're number five in the nation, and when they talk about the big 4...Alltel isn't on the list. Remember: Just because you have your own business card, doesn't mean you know what deals are going down other than what phones are on sale and who's in your fave five. If this merger goes through, I'm going to laugh...not as hard though as if the T-Mobile and Sprint merger goes down though, ROFL.
gr8vibe @ Jun 5th 2008 12:30AM
lol, you just cyber-kicked this guys ass.
snow7791 @ Jun 5th 2008 12:24AM
they are the largest geographical wise, (as in native home area) but number 4 customer wise. Thats where the largest comes from
VCI_Cell @ Jun 5th 2008 2:18AM
LoL @ poor John.
Anyway, why wouldn't VZW be able to fork over the $35bil? That's what Sprint paid for Nextel in 2005 -- surely Big Red must have more money than Sprint did three years ago.
Also ... when that private equity firm took Alltel private, I figured they'd be selling them off at some point. Isn't that what those firms exist for? But a full-on acquisition by VZW? If it happens, I'll flip out. As a friend of mine said the other day, why did the gov't even bother breaking up the Bell system all those years ago if they were just planning to let everyone reconglomerate into MegaCorp by 2010?
I subscribe to a theory I heard a while back when Alltel was acquired -- the equity firm will carve up its network, spectrum assets, and customers, and parcel them all out separately to different bidders in the wireless game. Sad, but most realistic, I think. But then, I have as much idea what I'm talking about as poor John (who, notably, hasn't been back).
Mark @ Jun 5th 2008 2:44AM
If this does go down then Alltel users can get in on the Blackberry Thunder that's a rumored lifetime exclusive for Verizon
Chris @ Jun 5th 2008 11:21AM
the deal is done! 28.1 billon
davidmcguire @ Jun 5th 2008 10:47AM
According to the Verizon website, as of this morning the deal has been struck. It will take several months for the regulators to approve it, but it looks like it's a go.
The D Train @ Jun 5th 2008 10:57AM
There was an official announcement from Lowell today to all the VZW employees that the merger papers were signed by both parties, there is a press release available as well:
VERIZON WIRELESS TO ACQUIRE ALLTEL; will Expand Nation’s most Reliable Wireless Network
BASKING RIDGE, N.J., and LITTLE ROCK, Ark. – Verizon Wireless has entered into an agreement with Alltel Corporation and Atlantis Holdings LLC, an affiliate of private investment firm TPG Capital and GS Capital Partners, to acquire Alltel Corporation in a cash merger.Verizon Wireless is a joint venture of Verizon Communications (NYSE: VZ) and Vodafone (NYSE and LSE: VOD).
Under the terms of the agreement, Verizon Wireless will acquire the equity of Alltel for approximately $5.9 billion. Based on Alltel’s projected net debt at closing of $22.2 billion, the aggregate value of the transaction is $28.1 billion.
The parties are targeting completion of the merger by the end of the year, subject to obtaining regulatory approvals.
Once this transaction closes, customers of both companies will have access to an expanded range of products and services, including a premier lineup of basic and advanced devices and an expanded IN Network calling community. Alltel customers also will benefit from advanced services including over-the-air downloadable music from a three-million-song library, and a network that is nationwide, for a uniform coast-to-coast experience. They also will be able to take advantage of industry-leading consumer policies, including Test Drive and Worry Free Guarantee®.
“This move will create an enhanced platform of network coverage, spectrum and customer care to better serve the growing needs of both Alltel and Verizon Wireless customers for reliable basic and advanced broadband wireless services,” said Lowell McAdam, Verizon Wireless president and chief executive officer.
Alltel serves more than 13 million customers in markets in 34 states. This includes 57 primarily rural markets that Verizon Wireless does not serve. The transaction puts the Alltel markets and customers on a path to advanced 4th generation services as Verizon Wireless deploys LTE technology throughout its network over the next several years. Alltel’s customers also will reap the benefits of Verizon Wireless’ Open Development initiative, which welcomes third-party devices and services to use the Verizon Wireless network.
Verizon Communications, the owner of the majority stake in Verizon Wireless, expects that the transaction will be immediately accretive, excluding transaction and integration costs. “This is a perfect fit, with Alltel’s high-value post-paid customer base, its solid financials, our common network technology, and significant, readily attainable synergies,” said Ivan Seidenberg, Verizon chief executive officer and chairman of the Verizon board. “Verizon Wireless’ acquisition of Alltel clearly provides opportunities for enhanced value for Verizon shareholders.”
Alltel President and Chief Executive Officer Scott Ford will continue in his current position as head of Alltel until the merger is completed.
“Both Alltel and Verizon Wireless have long track records of delivering a high-quality customer experience in the marketplace,” Ford said. “The combination of our two companies will continue and improve upon that heritage as, together, we can more quickly deliver an expanded range of innovative products and services to our customers.”
Verizon Wireless expects to realize synergies with a net present value, after integration costs, of more than $9 billion driven by reduced capital and operating expense savings. Synergies are expected to generate incremental cost savings of $1 billion in the second year after closing.
Alltel and Verizon Wireless both use a common network technology, which provides advantages of a seamless transition for Alltel customers, ease in integrating the two companies’ networks, and scale efficiencies in operating the larger integrated network.
Morgan Stanley acted as financial advisor to Verizon Wireless on this transaction and is providing bridge financing. Debevoise & Plimpton LLP acted as legal advisor to Verizon Wireless.
Citibank, Goldman Sachs and RBS advised the sellers on the transaction. Wachtell, Lipton, Rosen & Katz acted as legal advisor to Alltel, and Cleary Gottlieb Steen & Hamilton LLP and Ropes & Gray LLP acted as legal advisors to the sellers.
keith @ Jul 11th 2008 1:48AM
I am a loyal Alltel customer have been for the past 7 years,Verizon taking over made me vomit.I love my circle,i love the plans Alltel has and now,a second hand phone company is taking over my phone plan?...Don't understand it,if i wanted verizon i would have chosen them 7 years ago.All of the Alltel customers should and i would expect them to be grandfathered for everything,and not just until there 2 year plan ends and then get the screws from verizon taking over with there outragious price plans.If there are any loyal Alltel customers out there like me,don't go quietly let Verizon know how you feel about it.Like i said if we would have wanted Verizon WE would have chosen them,WE did not.I know one satisfaction i will get out of this,if verizon changes the current Alltel customers without grandfathering us completely,my satisfaction will be happily returning ALL of my families phones and cancelling service from them.
jake @ Sep 15th 2008 1:42PM
i was an alltel customer for 8 years and loved it. i always had service, even when other services didnt ,anywhere i went. i travel from ohio to florida alot and never lost service. alltel and verizon are basically the only carriers that work in ohio. nextel, sprint, t-mobile, at&t, they're service sucks up north. my circle was great. i had to switch to verizon because our family had verizon and even though all the calls were free for me ( they were in my circle ) it was costing them minutes & i couldn't get the whole family to change carriers...i hope verizon buys alltel because there is no match to alltel's phone service and verizon has some great phones. its the best of both worlds