Verizon to Acquire Rural Cellular Corporation

Verizon Wireless coverage may have just gotten a little better. Verizon markets themselves as the nation's most reliable wireless network. In a press release today, Verizon announced that they have entered into an agreement to acquire Rural Cellular Corporation for approximately $2.67 billion in cash and assumed debt. Verizon Wireless is a joint venture of Verizon Communications and Vodafone.

This acquisition will further enhance Verizon Wireless coverage in areas adjacent to its current areas of coverage. Richard Ekstrand, president and CEO of Rural Cellular Corporation stated, ""Since the founding of Rural Cellular Corporation in 1990, our mission has been to provide wireless service to rural areas across the country where tourism, agriculture and small businesses are prevalent." He went on to say that he, along with the Board of Directors, thought it a wise decision to sell their company to Verizon Wireless as Verizon would be able to provide a vast range of products and services to their existing customers as well as provide many opportunities for their employees.

Lowell McAdam, president and CEO of Verizon Wireless, said of this transaction, The addition of Rural Cellular's markets will enable us to expand our services into areas where previously we had little or no presence, and will give Rural Cellular's Unicel customers access to the nation's most reliable network and a broader range of voice and data services."

In fact, Rural Cellular Corporation serves a large amount of customers throughout five regional territories across the U.S. As of March 31, 2007, Rural Cellular Corporation served 716,000 customers. Verizon Wireless serves over 62 million customers. They are the largest U.S. wireless company and largest wireless data provider based on revenues.

Adding over 700,000 new customers may not seem like a lot when Verizon services over 62 million, however, Rural Cellular's network will allow Verizon to improve their range of coverage and roaming services. In fact, Verizon Wireless expects to realize more than $1 billion in synergies in reduced roaming and operations expenses according to the press release. The transaction will also provide Verizon with additional growth opportunities in the future.

Rural Cellular Corporation was a publicly traded company. Holders of Rural Cellular common stock will receive $45 per share in cash due to this sale transaction. This acquisition is still subject to government and regulatory approval as well as approval of Rural Cellular's shareholders. If all goes according to the current plan, the acquisition can be expected to close in the first half of 2008.

Sources:

PR Newswire Press Release, http://media.prnewswire.com/en/jsp/main.jsp?resourceid=3524490