Verizon Wireless agrees to buy Alltel for $5.9B

NEW YORK — Verizon Wireless has agreed to buy Alltel Corp. for $5.9 billion, which would make it by far the largest cellular carrier in the U.S.

Verizon Wireless would also assume $22.2 billion in debt in the deal, bringing the total value to $28.1 billion, the parties said Thursday.

Alltel has 13.2 million subscribers in 34 states, mainly in rural areas away from the coasts. Added to Verizon Wireless 67.2 million subscribers, the size of the combined company would surpass AT&T Inc., with 71.4 million subscribers.

The parties expect the deal to close by the end of the year, pending regulatory approvals. The deal is likely to face scrutiny by the Department of Justice and the Federal Trade Commission, but analysts expect it to pass.

Shares of New York-based Verizon Communications Inc., the controlling parent of Verizon Wireless, rose $2.17, or 5.9 percent, to $39.15 on the news. Verizon Wireless' other parent is Vodafone Group PLC of Britain, with a 45 percent share of the joint venture.

Verizon Wireless expects that the deal to add immediately to earnings, excluding transaction and integration costs. It expects the deal to generate "synergies" of more than $9 billion due to reduced capital expenditures and operating expenditures.

In a statement, Verizon Communications Chairman and Chief Executive Ivan Seidenberg said Alltel is a "a perfect fit," given its valuable customer base and solid financials. He also pointed to the fact that the carriers share the same network technology. AT&T uses an incompatible technology.

The deal comes just seven months after Alltel was sold to TPG Capital and a unit of Goldman Sachs Group for $24.7 billion.