Justice Department says Verizon must sell assets to buy Alltel
Triangle Business Journal
Seven state attorneys general and the U.S. Department of Justice filed a lawsuit Thursday in an attempt to block the effort of Verizon Communication Inc. to buy Alltel Communications LLC.
To complete the merger, Verizon (NYSE: VZ) has been ordered to divest assets in 100 cellular market areas in 22 states, including parts of North Carolina.
The Department of Justice says the merger, without the divestments, would reduce competition to customers, causing prices to go up, lower quality and lower investments in the communications network.
Little Rock, Ark.-based Alltel serves more than 13 million customers in markets in 34 states.
In its announcement of the merger June 5, Verizon said it was a $28.1 billion deal, with the acquisition at $5.9 billion and Verizon’s assumption of Alltel’s $22.2 billion debt.
Alltel, on its Web site, is telling customers that the merger will not impact cellular-phone service.
“Be assured for the duration of your contract you will continue to receive the same great service you have come to expect from Alltel,” the company says. “Additionally, you will see Alltel bring innovation and value to the market as we continue to serve your wireless needs.”
Verizon is based in Basking Ridge, N.J. It has 70.8 million customers and 2007 annual revenue of $43.9 billion. Alltel has 13 million customers in 34 states and annual revenue of about $9 billion.
Wichita (Kan.) Business Journal is a sister publication.
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