Verizon Agrees To Acquire Alltel

Hearing that Verizon Wireless has agreed to acquire Alltel Corp. for about $6 billion. Verizon will also assume about $22 billion in debt in the deal.

If completed, the deal would make Verizon the largest cellphone company, which would make it better suited to compete with AT&T.

Verizon hopes to complete the deal by the end of the year.

No word on how this will affect NASCAR, but I assume that it will be easier for Verizon to put its logos on the Penske Racing’s No. 12 Alltel Dodge driven by Ryan Newman than it was for Richard Childress Racing’s No. 31 AT&T Chevy.

Given that there’s a precedent, it would be harder for NASCAR to defend its practice of keeping wireless providers out of the Sprint Cup Series in this case because it would probably be considered a re-branding. AT&T won its court case to get the logos put on the No. 31, and I imagine that Verizon will do the same.

Verizon has sponsored Nationwide cars. They sponsored at least one this season, so I’m willing to be that they’d like to get into the Sprint Cup Series if they can.

 

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.

Bloomberg, the Houston Chronicle, USA Today, and the AFP are also reporting the story.

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.