The U.S. Department of Justice will require Verizon Communications Corp. to divest assets in 100 areas in 22 states in order to proceed with its $28 billion acquisition of Alltel Corp.
The Department said that the transaction as originally proposed would have substantially lessened competition to the detriment of consumers of mobile wireless telecommunications services in those areas, and likely would result in higher prices, lower quality and reduced network investments. 
Verizon and Alltel are significant competitors and each is the other's closest competitor for a significant set of customers in 94 Cellular Marketing Areas (CMAs), as defined by the FCC.
The divestitures cover the entire states of North Dakota and South Dakota; large portions of the states of Colorado, Georgia, Kansas, Montana, South Carolina, Utah and Wyoming; and portions of the states of Alabama, Arizona, California, Idaho, Illinois, Iowa, Minnesota, Nebraska, Nevada, New Mexico, North Carolina, Ohio and Virginia.
The Department's Antitrust Division, along with the Attorneys General of the states of Alabama, California, Iowa, Kansas, Minnesota, North Dakota and South Dakota, filed a civil lawsuit today in U.S. District Court for the District of Columbia to block the proposed acquisition of Alltel by Verizon. At the same time, the Department and state Attorneys General filed a proposed settlement that, if approved by the court, would resolve the competitive concerns in the lawsuit. Additionally, as a part of the settlement, the Department filed to modify two existing consent decrees.
The transaction also is subject to review by the FCC. The Department of Justice said it coordinated with the FCC throughout its deliberations.http://www.usdoj.govhttp://www.fcc.gov
- In June 2008, Verizon Wireless agreed to acquire Alltel Corporation for $5.9 billion. Based on Alltel's projected net debt at closing of $22.2 billion, the aggregate value of the transaction is $28.1 billion. Both carrier operate CDMA networks and plan future LTE migration. Together, the companies serve over 80 million wireless subscribers.
Alltel serves more than 13 million customers in markets in 34 states. This includes 57 primarily rural markets that Verizon Wireless does not serve. Alltel is currently owned by Atlantis Holdings LLC, an affiliate of private investment firm TPG Capital and GS Capital Partners.
At the time the deal was announced, Verizon Wireless expects to realize synergies with a net present value, after integration costs, of more than $9 billion driven by reduced capital and operating expense savings. Synergies are expected to generate incremental cost savings of $1 billion in the second year after closing.
