Cingular sells assets as part of AT&T Wireless deal - The Economic Times

NEW YORK: Cingular Wireless said on Friday it struck a deal to sell some assets to Alltel for $170m in cash, a move that will help it meet the government’s conditions for its purchase of AT&T Wireless.

Cingular, a venture of SBC Communications and BellSouth, will sell some former AT&T Wireless properties to Alltel in Oklahoma, Texas, Kentucky, Connecticut and Mississippi.

It will also sell some spectrum and network assets formerly held by AT&T Wireless in Wichita, Kansas, as well as wireless spectrum in Georgia and Texas. Alltel executives had said publicly they could be interested in some Cingular assets.

Cingular’s $41bn acquisition of AT&T Wireless Services closed in October, making it the biggest US wireless provider.

The agreement with Alltel will allow Cingular to meet “a substantial portion” of the divestiture obligations imposed by the US Department of Justice and Federal Communications Commission, as conditions of their approval of the AT&T Wireless merger, the companies said.
Cingular still has to sell airwaves in Dallas, Detroit, and Knoxville, Tennessee, and divest some operations in some markets in Texas, Missouri, Arkansas and Mississippi to meet government requirements for its AT&T Wireless deal.

Cingular and Alltel also agreed to swap some partnership interests, with Cingular receiving interests in markets including Wichita, Kansas, and Kansas City, Missouri.

Alltel will receive more ownership in markets in Michigan, Louisiana, and Toledo, Ohio.
Prudential analyst Chris Larsen said in a note to clients that the deal would give Alltel about 200,000 more subscribers. He sees Oklahoma as the most important purchase for Alltel, the leading rural telephone services provider.

Some analysts had expected Verizon Wireless, the country’s second biggest mobile provider, to bid for the Oklahoma assets because it does not have operations there. The deal is expected to close in the first quarter of ’05, pending regulatory approval.

Alltel shares rose 61 cents or more than 1% to $57 on the New York Stock Exchange where SBC’s stock gained 12 cents at $25.48 and BellSouth was up 14 cents at $27.20.

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