The Justice Department on Thursday effectively gave Verizon Wireless the go-ahead to buy Alltel Corp. in a $28 billion deal that would create the nation’s largest wireless carrier.
Verizon Wireless, a joint venture between Verizon Communications Inc. and Britain’s Vodafone Group PLC, already has agreed to the government’s condition that it sell assets in 22 states.
“We’re pleased that the Department of Justice has granted approval,” said Robin Nicol, a Verizon Wireless spokeswoman. “It’s another step in the right direction.”
The Federal Communications Commission is slated to vote on the merger on Tuesday.
Andrew Moreau, an Alltel spokesman, said the company is “looking forward to the FCC meeting scheduled for next week.”
Justice Department lawyers joined seven states in a lawsuit filed Thursday to block the merger, but also filed a proposed settlement that would require Verizon Wireless to divest assets in 100 markets. Without that action, the Justice Department said, the deal would hurt competition, drive up consumer prices and likely produce a lower-quality network.
“The divestitures required are necessary to protect wireless customers and are among the most extensive required by the department in a wireless case,” Assistant Attorney General Thomas O. Barnett said in a statement.
Under terms of the deal, Verizon Wireless plans to buy Little Rock, Ark.-based Alltel Corp. for $5.9 billion plus the assumption of $22.2 billion in debt.
To win regulatory approval, Verizon must sell assets in 100 areas, including holdings in the entire states of North Dakota and South Dakota and large portions of Colorado, Georgia, Kansas, Montana, South Carolina, Utah and Wyoming. Verizon also must sell assets in Alabama, Arizona, California, Idaho, Illinois, Iowa, Minnesota, Nebraska, Nevada, New Mexico, North Carolina, Ohio and Virginia.
Rebecca Arbogast, an analyst with Stifel Nicolaus, estimates the combined company will have about 78 million subscribers nationwide following the divestitures. Verizon Wireless had 70.8 million…