Acquisition Will Expand Nation's Most Reliable Wireless Network to Many
Rural Markets
BASKING RIDGE, N.J., Aug. 7 /PRNewswire/ -- Verizon Wireless, a joint
venture of Verizon Communications (NYSE: VZ) and Vodafone (NYSE and LSE:
VOD), announced today it has completed its purchase of Rural Cellular
Corporation, doing business as Unicel, for $2.66 billion in cash and
assumed debt.
The acquisition will expand Verizon Wireless' network coverage to many
rural markets around the country and increases the company's customers by
more than 625,000.
The purchase will increase Verizon Wireless' licensed coverage area by
4.7 million people, and will add licenses covering markets in Maine, New
Hampshire, Massachusetts, Alabama, Mississippi, Minnesota, North Dakota,
South Dakota, Wisconsin, Idaho, Washington and Oregon.
Market Integration
Verizon Wireless will begin today to serve customers in Rural Cellular
markets that will be merged with Verizon Wireless' operations. The company
will continue to use the Unicel brand for the next several months, as it
works to integrate networks, and deploy CDMA technology and high-speed
wireless broadband service. Verizon Wireless will maintain Rural Cellular's
existing GSM networks to continue serving the roaming needs of other GSM
carriers' customers.
Customers in markets to be integrated will receive a letter in the next
few weeks informing them about the recently completed purchase. Also,
before the network conversion in an area is complete, customers will
receive a letter from Verizon Wireless explaining their service transition.
Customers who will require a new handset due to network enhancements will
receive information about handset options, which will include a variety of
free and low-cost devices. Customers do not need to take any action at this
time.
Virtually all Rural Cellular employees have received employment offers
and have accepted them. During the network conversion period, nearly every
Unicel-branded store will remain open to serve customers. Unicel will be
re-branded as Verizon Wireless in phases when customers are transitioned to
the Verizon Wireless network and billing conversions are completed,
beginning early in 2009 and continuing through mid-year.
Divestiture Markets
The completion of the Rural Cellular purchase required approvals by the
Department of Justice (DOJ) and the Federal Communications Commission
(FCC). As a result of the approval process, Verizon Wireless has placed
Rural Cellular licenses and assets in Vermont, New York and parts of
Washington in a management trust. The trust will continue to operate the
markets under the Unicel brand until they are sold to a buyer, and these
markets will not be integrated with Verizon Wireless operations.
In addition, it is expected that Rural Cellular's markets in southern
Minnesota and western Kansas will be divested as a result of the regulatory
approval process for Verizon Wireless' proposed purchase of Alltel
Corporation. Consequently, those markets also will continue to be served
under the Unicel brand, and will not be integrated into Verizon Wireless.
Wireless service for Unicel customers in the markets named above --
Vermont, New York, Kansas, and parts of Washington and Minnesota -- will
remain unchanged and customers in these markets do not need to take any
action at this time.
Financial Information
Verizon Wireless expects to realize approximately $1 billion in
synergies in reduced roaming and operations expenses.
Under the terms of the acquisition, Verizon Wireless paid $45 in cash
for each share of Rural Cellular's common stock for a total common equity
price of approximately $764 million on a fully diluted basis.
Immediately prior to the closing of the transaction, Rural Cellular
called for redemption of all its outstanding long-term notes, with a
redemption date of September 5, 2008. Following the closing of the
transaction, Verizon Communications Inc. guaranteed these notes.
Verizon Wireless announced its agreement to acquire Rural Cellular in
July 2007, pending regulatory approval. The FCC approved the transaction
earlier this month.
About Verizon Wireless
Verizon Wireless operates the nation's most reliable wireless voice and
data network, serving 68.7 million customers. Headquartered in Basking
Ridge, N.J., with 70,000 employees nationwide, Verizon Wireless is a joint
venture of Verizon Communications (NYSE: VZ) and Vodafone (NYSE and LSE:
VOD). For more information, go to: http://www.verizonwireless.com. To preview and
request broadcast-quality video footage and high-resolution stills of
Verizon Wireless operations, log on to the Verizon Wireless Multimedia
Library at http://www.verizonwireless.com/multimedia.
|
