AP News - Verizon Wireless is in talks to buy rural mobile service provider Alltel Corp for about $27 billion in debt and cash to create a company that would overtake AT&T Inc as the No. 1 U.S. mobile service, a source familiar with the talks told Reuters on Wednesday.
While the details of the deal were still being worked out, the person, who declined to be identified, said that the $27 billion valuation could be comprised of mostly debt and a smaller amount of cash. Alltel had $23.35 billion in long-term debt on its balance sheet at the end of the first quarter.
A second person also briefed on the talks agreed Verizon was in talks to buy Alltel. nalysts were surprised by the timing of the deal since Verizon had stood by when private equity investors bought Alltel last year, but they said it made sense for Verizon Wireless to expand through an acquisition.
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