Alltel acquires CenturyTel’s wireless properties

Alltel announced it would purchase all the wireless properties owned by CenturyTel for $1.65 billion in cash. The deal brings Alltel’s customer base to 7.4 million wireless customers in 24 states.

Alltel will add more than 700,000 CenturyTel customers and expand its wireless footprint into new markets across Arkansas, Louisiana, Michigan, Mississippi, Texas and Wisconsin.

The transaction also includes minority partnership interests in cellular operations of 2 million proportionate POPs and PCS licenses covering 1.3 million POPs in Wisconsin and Iowa.

“We believe this transaction solidifies Alltel’s position as a telecommunications operator in rural markets. It will strengthen our footprint,” said Kevin Beebe, Alltel’s communications president during a conference call.

Alltel plans to finance the CenturyTel purchase through a combination of debt and equity with the goal of maintaining its "A/A2" credit rating, said Scott Ford, Alltel’s president and chief operating officer.

The company actually has received interim financing from Merrill Lynch and Bank of America, in addition to existing credit facilities. Alltel plans to use the financing for this transaction as well as for its pending acquisition of 600,000 Kentucky wireline customers from Verizon.

Last fall, Alltel attempted to buy all of CenturyTel, which rejected the unsolicited bid that included its wireline business. The very public offering revealed that CenturyTel’s previously undisclosed plans to sell its wireless arm, prompting CenturyTel to sue Alltel for violating a nondisclosure clause. As a condition of this deal, CenturyTel will drop the lawsuit, Ford said.