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Verizon Figures To Acquire Alltel By Year's End

Verizon is poised to become the largest cell phone service provider in the United States, leapfrogging over the current leader, AT&T.
Verizon Wireless is staying the course in its $28.1 billion bid to acquire Alltel even as the stock and financial markets meltdown continues and a ratings agency has raised questions about the proposed takeover.

A Verizon Wireless spokesperson on Monday told The Associated Press that the company is on schedule to close the transaction by the end of the year.

Verizon already has agreed to give up some holdings in some markets to obtain approval for the acquisition, which would enable Verizon to become the largest cell phone service provider in the United States, leapfrogging over the current leader, AT&T. Verizon Wireless is owned jointly by Verizon Communications and Vodafone Group with Verizon as the majority equity owner.

In a report in late September, the Fitch Ratings agency questioned whether Verizon could wrap up the deal by the end of the year. In one potential complication, the ratings agency noted that Verizon has moved to satisfy Department of Justice antitrust concerns by agreeing to divest various markets, but if the number of divestures is too high, they could be problematic for the acquisition.

"Fitch expects the DOJ will not require VZW to divest a material number of additional markets at the conclusion of its review," Fitch said in its review.

Fitch suggested that U.S. Cellular could be "well-positioned to consider" acquiring Verizon properties in some markets. The three companies in question -- Verizon Wireless, Alltel, and U.S. Cellular -- all use the same CDMA infrastructure, making it relatively easy for them to swap spectrum and service.

"There could be more markets we have to divest," the Verizon spokesperson told AP. "Right now we have no idea, but even if those numbers increase, we still think we'll be able to reach an agreement with DOJ."