Alltel Acquires Western Wireless

In an acquisition that makes it the nation’s fifth-largest wireless carrier,
Alltel is acquiring Western Wireless in
a stock-and-cash deal valued at $6 billion.

The Little Rock, Ark.-based Alltel gains approximately 1.4 million domestic
wireless customers in 19 states, which gives the company 10 million domestic customers. The deal
also brings Alltel 1.6 million international customers in six countries.

Headquartered in Bellevue, Wash., Western Wireless operates under the
Western Wireless and Cellular One brand names and licenses the Cellular One
name in 16 additional states and the Caribbean.

According to Alltel, each share of Western Wireless stock will be exchanged
for .535 shares of Alltel common stock and $9.25 in cash. Alltel will issue
approximately 60 million shares of stock and pay about $1 billion in cash.
The company is also assuming Western Wireless’ net debt of $1.5 billion.

“The wireless industry is gravitating swiftly to a smaller number of large
national and regional players,” Western Wireless CEO John W. Stanton, who
will be joining the Alltel board, said in a statement. “The combination of
Western Wireless with Alltel creates a rural operator using multiple
technologies with the largest footprint in the country.”

Scott Ford, Alltel’s president and CEO, told reporters in a conference call
he expects minimum job losses when the acquisition closes in the second
quarter of this year. Without giving a specific number, Ford said he
anticipates “much less” than 10 percent of the Western group will face
layoffs.

Through the acquisition, Alltel adds wireless operations in nine western states, and
the company becomes an independent regional roaming partner for each of the
nation’s top four wireless carriers.

The deal also gives Alltel nearly $10 billion in annual revenues and
operating income before depreciation and amortization of nearly $4 billion.
Alltel expects net present value of operating synergies, interest and tax
savings to be approximately $800 million.

Although Alltel provides local telephone, long-distance, Internet and
high-speed data services to residential and business customers, the deal
increases the company’s revenue mix to 70 percent wireless.

“This combination strengthens Alltel’s position as a key player in the
highly competitive communications industry,” Ford said. “This transaction is
in keeping with Alltel’s efforts to maintain our financial discipline while
adding wireless properties that contribute to our long-term growth.”

Ford said the deal still leaves Alltel with “some room to grow the business
through acquisitions.”