FCC clears Verizon-Rural Cellular deal
WASHINGTON (Reuters) - U.S. communications regulators conditionally approved Verizon Wireless's $757 million purchase of Rural Cellular Corp RCCC.O but will require one of the companies to sell licenses in six markets in order to improve competition.
Verizon Wireless, a venture of Verizon Communications (VZ.N) and Vodafone Group Plc (VOD.L), is seeking to buy Rural Cellular as part of an effort to extend its reach in rural areas. Approval by the U.S. Federal Communications Commission is the final hurdle needed to complete the deal.
The FCC, which announced its approval late on Friday, said the companies would have to shed licenses in several parts of Vermont, one area of New York state and two areas of Washington state.
The Justice Department gave its antitrust approval in June, conditioned on divestitures in areas where the merger would substantially lessen competition.
Shareholders of Rural Cellular approved the deal last year.
The FCC's ruling "is the final approval," said Verizon spokeswoman Nancy Stark. "We have to close the deal, and we'll have a public announcement when that happens. We expect to close it soon."
In announcing the deal a year ago, Verizon Wireless said the deal was worth $2.67 billion, including the assumption of debt. It expected more than $1 billion in savings from lower roaming fees and operating expenses as well as an additional 700,000 subscribers.
Only about 40 percent of Rural Cellular's network runs on CDMA, the most widely used wireless technology standard in the United States, and the remainder runs on GSM, a technology popular in Europe and used by AT&T's wireless service.
Verizon Wireless, which runs its services on CDMA, has said it would add CDMA capability to the Rural Cellular network.
Shares of Verizon were off 1 percent, or 32 cents, at $33.68 in morning trade on the New York Stock Exchange. Shares of Rural Cellular were trading at $44.99 on the Nasdaq, just a cent below the $45 per share in cash being offered in the deal.
Shares of Vodafone were down 0.2 percent in London.
(Reporting by Susan Heavey; Editing by Derek Caney)
