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Alltel to Purchase Western Wireless in $6 Billion Transaction
"LITTLE ROCK, Ark.-- Alltel has reached an agreement to purchase Western Wireless Corp. of Bellevue, Wash., in a stock-and-cash transaction valued at approximately $6 billion, officials announced earlier today. Alltel will gain about 1.4 million domestic wireless customers in 19 western and midwestern states that are contiguous to existing properties, giving the company 10 million domestic wireless customers in 33 states and creating additional scale and scope in attractive and complementary markets. The purchase also adds 1.6 million international customers in six countries and will create the fifth-largest wireless provider in the United States.Each share of Western Wireless stock will be exchanged for 0.535 shares of Alltel common stock and $9.25 in cash. Western Wireless shareholders will have the ability to make an all-stock or all-cash election, subject to proration. In aggregate, Alltel will issue approximately 60 million shares of stock and pay approximately $1 billion in cash. Alltel also will assume estimated net debt of $1.5 billion.The transaction, expected to close by mid-year, will be accretive to earnings in 2006. The agreement requires approval from Western Wireless shareholders and regulatory authorities. The stock portion of the merger consideration is expected to be tax-free to Western Wireless shareholders."Alltel will maintain a solid balance sheet and financial flexibility while adding properties in the high-growth wireless industry" said Scott Ford, Alltel president and chief executive officer. "The domestic properties of Western Wireless are contiguous to Alltel's existing operations and create additional wireless scale and scope in attractive and complementary markets."Western Wireless, owner of the Cellular One brand, is a rural communications provider with wireless operations in 107 markets in 19 states and international operations that are licensed to service more than 50 million people in six countries, primarily Austria and Ireland. The domestic retail stores operate under the Western Wireless and Cellular One brand names. "The wireless industry is gravitating swiftly to a smaller number of large national and regional players," said John W. Stanton, chairman and CEO of Western Wireless, who will serve on Alltel's board. "The combination of Western Wireless with Alltel creates a rural operator using multiple technologies with the largest footprint in the country."Following are highlights of the transaction:Alltel will be the nation's fifth-largest wireless carrier with 10 million domestic wireless customers serving a population of 72 million in 33 states, covering about 25% of the U.S. population and 56% of the land mass in the contiguous United States; 1.6 million international wireless customers in six countries serving a population of 50.6 million; and three million wireline customers in 15 states.Alltel will have nearly $10 billion in annual revenues and operating income before depreciation and amortization of nearly $4 billion. Alltel's revenue mix increases to 70% wireless, the fastest-growing area in the communications industry.Alltel will add wireless operations in nine new states: California, Idaho, Minnesota, Montana, Nevada, North Dakota, South Dakota, Utah and Wyoming. The transaction also significantly expands its wireless operations in several other states, including Arizona, Colorado, New Mexico and Texas.The company expects net present value of operating synergies, interest and tax savings to be approximately $800 million.Visit Western Wireless Corp.: www.WesternWireless.com"