Bellevue-based Western Wireless reached a deal last night to be acquired by Alltel for $4. 4 billion — a move that will uproot yet another wireless company from the Puget...

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Bellevue-based Western Wireless reached a deal last night to be acquired by Alltel for $4.4 billion — a move that will uproot yet another wireless company from the Puget Sound area.

Executives from both companies signed the acquisition papers late last night in New York City after receiving the green light from their boards of directors, according to Western Wireless Chief Executive John Stanton.

Alltel will pay $40 per share in a combination of cash and stock. Western Wireless shareholders will receive $9.25 in cash and .535 shares of Alltel stock for each share of Western Wireless they own, he added. Alltel also agreed to assume $1.8 billion of Western Wireless’ debt.

Stanton said he had talked “on and off for the last several months” with Alltel about being acquired, but discussions only got serious a few days before Thanksgiving.

With the amount of consolidation going on in the industry, Western Wireless’ acquisition was inevitable, he said. The company’s business has quadrupled since its initial public offering, largely through internally generated growth, but its relative size shrunk as rivals like Verizon Wireless and Cingular Wireless grew through acquisitions.

“You really are seeing a consolidation down to a few very large players, and we needed to be a part of one of them,” he said.

The challenge for the company then became to find the right partner, and Stanton said Alltel had many of the same characteristics as Western Wireless: It’s entrepreneurial, family oriented and will likely continue the initiatives Western Wireless has begun.

The vast majority of Western Wireless employees will continue to be employed by Alltel, he added. Some will be laid off, but Stanton said they will receive a series of “economic incentives” so they can take some of the benefit of the transaction with them.

On the occasions where two people have the same job, Alltel will continue to employ the person who is the most talented and best suited for the position, he said.

Stanton said he will resign from management but will take a seat on Alltel’s board of the directors. He said he wasn’t sure what he would do next.

“I’ve never had a period like this in which I will get to think about what comes next,” he said.

Last year, after some speculation about his political intentions, Stanton decided not to run for the Republican nomination for governor of Washington.

Last night’s deal signals consolidation has reached the wireless industry’s smaller-tier companies, something analysts have been expecting. Among the nation’s largest carriers, Cingular Wireless acquired AT&T Wireless last year and Sprint and Nextel Communications have agreed to merge.

An Alltel and Western Wireless combination would have about $10 billion in sales and 9.6 million wireless customers. The acquisition is likely not significant enough to boost Alltel, based in Little Rock, Ark., beyond its ranking as the nation’s sixth-largest wireless carrier. The company also has 3 million subscribers in its fixed-line business.

Western Wireless made a name for itself by offering wireless services in rural areas and smaller markets. Its coverage area spans about a third of the country and serves 1.2 million wireless customers.

Stanton built Bellevue-based VoiceStream Wireless, from the ground up before it was sold to Deutsche Telekom, the German telecommunications giant, for $30 billion. The company was renamed T-Mobile USA after the transaction.

Western Wireless, which sells service primarily under the Cellular One brand, gets additional revenue by allowing the nation’s five largest wireless carriers to use its broad network.

Its two largest roaming customers are AT&T Wireless and Cingular, which are in the process of integrating their two companies after their $41 billion deal closed in late October.

Western Wireless also has international operations in several countries, including Austria, Ireland, Bolivia, Ghana and Haiti.

The company is a good strategic fit for Alltel because it will fill in areas between Alltel’s smaller markets, said Morningstar analyst Michael Hodel last week. It also will give Alltel a presence in the western United States.

Alltel has wireless and fixed-line customers, and, like Western Wireless, focuses on serving rural areas of the country, but mostly in the South. It also has pieces of some larger markets, including Cleveland and Phoenix.

The company faces increasing competition from larger rivals, particularly Verizon Wireless, which analysts say covers much of Alltel’s territory. It has about 8.4 million wireless subscribers, and would increase that total to 9.6 million once Western Wireless’ customers are added to its rolls.

The acquisition of Western Wireless means another loss of wireless headquarters status for the Seattle area. Cingular maintained its Atlanta headquarters after its deal and made AT&T Wireless’ Redmond base one of several regional headquarters.

T-Mobile USA continues to be based in Bellevue, but it’s part of the Deutsche Telekom’s international T-Mobile unit.