Published on June 5th, 2008 | by Michael J Smith0
Verizon May Acquire Alltel
The Wall Street Journal is reporting that Verizon Communications is in talks with Alltel Corp. about a potential purchase worth $27 billion. The deal would allow Verizon to better compete with AT&T.
Last year, Alltel was sold and lenders are still holding the debt because they can’t sell it. A deal with Verizon would allow the debt to be retired.
The deal is in the early stages and could fall through, sources say.
The New York Times, however, says that the deal is likely. Previous attempts to make this merger happen hit a snag because Verizon’s partner, Vodafone, opposed it because it would have diluted their stake.
Because this deal would be financed entirely by debt, Vodafone’s stake would be unaffected.
If the deal goes through, and Verizon purchases Alltel, it’s not clear whether the company would keep the brand name or not. If they decide not to hold on to the brand name and change all Alltel businesses to Verizon, it is possible that the No. 12 Dodge driven by Ryan Newman could become the Verizon Dodge.
In its deal with Sprint Nextel, NASCAR agreed not to allow new wireless sponsors into the sport’s main series, but old teams with wireless sponsors were “grandfathered” into the series. If those sponsors (Cingular and Alltel) leave the sport, they can not return, as is my understanding.
When Cingular changed to AT&T, they battled NASCAR in court last year about the logos on the Richard Childress Racing’s No. 31 AT&T Chevy.
Because AT&T won, they were allowed to change the logos, which means it’s most likely that Alltel will be allowed to do the same.