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Verizon Wireless to Buy Alltel In $28.1 Billion Deal
Reuters | June 05, 2008 | 10:09 AM EDT

Verizon Wireless agreed to buy Alltel for $28.1 billion, including $22.2 billion in debt, vaulting the combined company to first place in the U.S. mobile services market ahead of AT&T .

Verizon said the equity value of the deal would be about $5.9 billion.

Verizon Wireless, 55 percent owned by Verizon Communications and 45 percent owned by Britain's Vodafone Group, said the deal would generate savings of $1 billion in the second year after closing.

It said it expects total savings with a net present value of more than $9 billion.

The deal comes only seven months after Alltel was bought by TPG Capital and Goldman Sachs Group's GS Capital Partners for $27.5 billion. (See the accompanying Faber Report on Verizon buying Alltel)

That deal was the largest ever private equity investment in the U.S. wireless industry, but it closed amid a mounting credit crisis that has curtailed the leveraged buyout boom.

Some analysts said Verizon could be in a good position to refinance Alltel's debt at a lower interest rate; others said that a deal could also help Verizon create savings from a network and handset perspective.

Overall, analysts said, the deal made sense.

"Put simply, they can run Alltel more efficiently than Alltel can," said Bernstein analyst Craig Moffett.

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