Verizon to Buy Rural Cellular

No. 2 wireless carrier Verizon Wireless said Monday it will purchase Rural Cellular Corp. for $757 million in cash. The deal will expand its coverage in rural markets by adding 4.7 million PoPs, and will bring more than 700,000 new customers into the base.

The deal is part of an ongoing industry quest for greater rural coverage.The move comes weeks after No. 1 mobile operator AT&T Inc. said it would buy Dobson Communications Corp. for $2.8 billion in order to expand its rural presence.

Rural Cellular's network is located in Maine, Vermont, New Hampshire, New York, Massachusetts, Alabama, Mississippi, Minnesota, North Dakota, South Dakota, Wisconsin, Kansas, Idaho, Washington and Oregon.

Verizon, a joint venture of Verizon Communications and Vodafone plc, said the benefits are not just the addition of markets where it previously relied on roaming relationships. It also will save $1 billion in opex, the company said.

Including assumed debt, the carrier values the deal at about $2.67 billion.

The deal has been approved by the boards of both companies and is expected to close in the first half of 2008, subject to governmental and regulatory clearance and approval of Rural Cellular's shareholders. Rural Cellular shareholders will receive $45 per share in cash.

Rural Cellular Corp.
Verizon Wireless www.verizonwireless.com

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