(Adds quote, background on deal)
WASHINGTON Oct 30 Verizon Wireless won
antitrust approval to purchase rural wireless provider Alltel
Corp on the condition that it divest assets in 22 states, the
U.S. Justice Department said on Thursday.
The deal still needs approval from the U.S. Federal
Communications Commission which is expected to approve the
combination at a Nov. 4 meeting.
Verizon Wireless, owned by No. 2 U.S. phone company Verizon
Communications Inc (VZ.N) and Britain's Vodafone Group Plc
(VOD.L), said in June it would buy Alltel for $28.1 billion,
The divestitures required by the Justice Department cover
all of North Dakota and South Dakota; large portions of
Colorado, Georgia, Kansas, Montana, South Carolina, Utah and
Wyoming; and parts of Alabama, Arizona, California, Idaho,
Illinois, Iowa, Minnesota, Nebraska, Nevada, New Mexico, North
Carolina, Ohio and Virginia.
"The divestitures required are necessary to protect
wireless customers and are among the most extensive required by
the department in a wireless case," said Thomas Barnett, head
of the Justice Department's Antitrust Division.
Under the deal, Verizon Wireless would acquire the equity
of Alltel for $5.9 billion and take on an estimated $22.2
billion in debt, mostly incurred when Alltel was taken private
in November in a leveraged buyout by TPG Capital [TPG.UL] and
Goldman Sachs Group Inc's (GS.N) GS Capital Partners.
Investors have been concerned that debt financing costs for
the deal have risen, but Verizon said earlier this week that
the transaction would pay for itself and the long-term benefits
were not negated by short-term issues in financial markets.
(Reporting by Diane Bartz; Editing by Tim Dobbyn)