|
An inside industry source has revealed that Verizon Wireless is in talks to purchase rural mobile service provider Alltel Corp. The purchase is going to be made for about $27 in debt and cash to create a company that would overtake AT&T Inc as the number one US mobile service provider. Last year, Alltel was sold to private equity firms TPG Capital and GS Capital Partners, the buyout arm of Goldman Sachs for about $25 billion on November 16. Including debt, the cost of the purchase was about $27.5 billion.
Analysts feel that Verizon wireless can run Alltel better than Alltel itself. The deal according to the analysts increases the exposure of Verizon to wireless, which is the best business in their portfolio and lets them exercise their advantage of scale to run the business. According to the source, the ownership structure of Verizon will not be altered after the deal. Verizon Wireless is currently 55 percent owned by Verizon Communications Inc and 45 percent by Vodafone group.
