Concerns linger about the fate of Verizon Wireless'
$28.2 billion acquisition of Alltel Corp., a combination that would propel the firm past AT&T Inc. as the largest cell phone service provider in the industry. The two big--and mostly countervailing-- factors are the credit crunch and the possibility that a new FCC in an Obama administration would impose more onerous conditions.
Writing in the Deal on Oct. 9, Chris Nolter and Vipal Monga had this to say:
Underscoring the severity of the debt crisis, several sources said that Verizon
Wireless has not been able to get fully committed financing to back the
acquisition of Alltel.
That would have seemed inconceivable when the
companies announced the buyout in June, or even a month ago. Yet even amid the
continuing credit turmoil, people felt that Verizon Wireless would be able to
close the deal. As they explain it, the banks that provided financing to
Alltel's private equity backers would rather hold investment-grade Verizon
Wireless' debt on their books than high-yield LBO debt that would undoubtedly be
written down on their books.
Verizon is forging right ahead as it looks for FCC and Justice Department approval. In
a letter to the FCC, Verizon said it would divest assets in 15 cellular markets located in Alabama, Arizona, Georgia, Iowa, Minnesota, Nebraska, New Mexico, North Carolina, South Carolina and Utah. That's in addition to the 85 other markets Verizon agreed to shed. -
Baz Hiralal
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