Verizon Wireless says it is moving forward with plans to acquire Alltel for $28.1 billion, although the country's financial climate has worsened since the companies reached an agreement four months ago.
LITTLE ROCK, Ark. — Verizon Wireless says it is moving forward with plans to acquire Alltel for $28.1 billion, although the country’s financial climate has worsened since the companies reached an agreement four months ago.
Verizon insists the deal, which would make it the nation’s largest wireless carrier, is still on track to close by the end of the year, spokeswoman Robin Nicol said.
But a major ratings firm that evaluates companies’ financial strength for world credit markets is not so sure.
“Considering the size of this deal, it would be surprising that Verizon would enter something with such significant risk that it really threatens to preclude this deal from closing,” said Bill Densmore of New York-based Fitch Ratings.
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In a Sept. 26 report, largely written by Densmore, Fitch identified several factors that could threaten New Jersey-based Verizon.
For one, it must have enough financial strength to buy assets it will probably have to sell for federal regulators to approve the deal.
Also, the deal with Little Rock-based Alltel contains triggers that allow Verizon to back out if the company has to divest too many subscribers for federal approval.
So far, nothing has emerged from talks between Verizon and the Department of Justice, Nicol said.