Cingular sells assets to Alltel for $170 mn

New York | Updated: Nov 29 2004, 05:30am hrs
Cingular Wireless said on Friday it struck a deal to sell some assets to Alltel Corp. for $170 million in cash, a move that will help it meet the governments conditions for its purchase of AT&T Wireless.

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

Alltel executives had said publicly they could be interested in some Cingular assets. Cingulars $41 billion acquisition of AT&T Wireless Services Inc. 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.