US telecom Alltel to buy Meteor parent for $6bn

US telecoms company Alltel has reached an agreement to buy Meteor Mobile Communications parent company Western Wireless in a stock-and-cash transaction valued at approximately $6bn (€4.6bn).

Alltel will gain about 1.4 million domestic wireless customers in 19 western and midwestern US in the deal, giving the company 10 million domestic wireless customers in 33 states, as well as 1.6 million international customers in six countries.

Each share of Western Wireless stock will be exchanged for .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 $1bn in cash. Alltel also will assume estimated net debt of $1.5bn in the deal.

The transaction, expected to close by mid-year 2005, 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.

"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. "We are confident in the future of Alltel.”