Verizon said Friday it will also take on $22.2 billion in Alltel debt.
Basking Ridge, N.J.-based Verizon says it will retain all Alltel employees below the executive level as the company assesses which positions need to be cut or kept under the new arrangement. When Verizon President and Chief Executive Lowell McAdam addressed an audience in Little Rock in August, he said it would take a year after closing the sale to assess employee retention.
The buyout is expected to result in the loss of many of the best-paying positions among the 3,000 employees at Alltel's Little Rock headquarters.
"Alltel employees below executive level will continue in their present jobs as Verizon Wireless assesses staffing needs required to best serve customers and achieve synergies," the company said in its news release. Verizon has not released more specific details.
As a condition of the purchase, regulators forced Verizon to sell 105 overlapping markets in 24 states. Most of the properties sold will be from Alltel. Verizon says it will divest in four markets it held prior to the buyout, and will sell Unicel operations it owns in southern Minnesota and western Kansas.
Verizon picks up Alltel's 12.9 million customers, though 2.1 million of them are in territory that will be sold. Verizon will have 83.7 million total customers after the divestiture.
Verizon says Alltel customers do not need to take any action at present, though they will soon receive a letter explaining the transition. Most will be able to keep their same handsets as Verizon and Alltel are on the same system.
Alltel customers will see Verizon begin to place its own brand name starting in the second quarter, a process that will continue through the third quarter, Verizon said. As the transition is being made, Alltel's retail stores will remain open.
Verizon Wireless announced in June it would buy Alltel. The FCC approved the purchase in November and Justice Department gave its approval in October. Verizon says the purchase will bring more than $9 billion in synergies from capital and operating expenses, after costs.
Alltel was taken private in November 2007 when it was purchased for $24.7 billion by two private equity groups. Alltel had little debt going into the transaction but picked up a burden estimated at $23 billion to finance the buyout.
The purchasers were TPG Capital, formerly Texas Pacific Group, and GS Capital Partners, a subsidiary of Goldman Sachs. They paid Alltel shareholders $71.50 per share in cash, a 23 percent premium. Alltel had about 15,000 workers at the time.
In 2006, Alltel spun off its traditional phone business to Valor Communications Group of Irving, Texas. That $4.9 billion deal created Windstream Corp., which is based in Little Rock.
Verizon said it would complete a set of transactions Friday that would reduce its Alltel-incurred debt to third parties to $2.7 billion. Verizon said that sum will decline further to about $2.5 billion within the next 30 days. The company says it used cash and borrowing from credit facilities to buy Alltel and pay the debt it carried.
Verizon has 85,000 employees.
At midday, Verizon shares rose 6 cents to $32.45.