BEDMINSTER, NJ — Verizon Wireless and Price Communications [NYSE: PR] have agreed to combine the business operations of Price Communications Wireless with certain assets of Verizon Wireless, in a transaction valued at $1.7 billion, including $550 million in net debt that will be assumed or redeemed.
Price Communications Wireless serves more than 560,000 customers in 16 markets throughout Georgia, Alabama, South Carolina and Florida. The company's wireless licenses cover approximately 3.4 million POPS (Population Served).
"This transaction greatly enhances the footprint and customer base of Verizon Wireless operations in the fast-growing Southeast, expanding our Atlanta business south to Jacksonville, Florida, east to Augusta, Georgia and further Southeast to the Atlantic coastline, including Savannah, Georgia," noted Denny Strigl, president and CEO of Verizon Wireless. "Upon closing, we will begin integrating the Price networks, converting them to our CDMA digital standard and delivering more consistent service quality and features to our customers as they roam along the eastern seaboard."
Under the terms of the transaction, which replaces an agreement announced by the companies in November 2000, Price Communications Wireless and Verizon Wireless will form a limited partnership consisting of Price Communications' wireless operations and certain Verizon Wireless assets. Verizon Wireless will control and manage the partnership.
Price Communications' partnership interest will be exchangeable into Verizon Wireless or Verizon Communications stock, subject to the following conditions:
- After the occurrence of a Verizon Wireless Inc. IPO, by the later of 60 days following the IPO and one year after the establishment of the partnership, Price Communications may elect to exchange its interest for shares of Verizon Wireless Inc. common stock at the IPO price. If a Verizon Wireless IPO does not occur within four years of the formation of the partnership, Price's partnership interest will be converted into Verizon Communications common stock. The exchange price, in the event of conversion into Verizon Communications stock, is collared, subject to certain exceptions, at a minimum of $40 and a maximum of $74 per share.
- An exchange into either Verizon Wireless or Verizon Communications stock would be subject to certain lock-up and restricted sale provisions governing the subsequent sale or distribution of the stock.
Verizon Wireless expects to close the transaction during the second quarter of 2002. The prior transaction was a stock for stock deal, and was conditioned upon the completion of a previously announced initial public offering of common stock of Verizon Wireless Inc. by Sept. 30, 2001. However, market conditions delayed the IPO and on July 31, 2001, the companies announced that they had begun discussing alternative structures and forms of consideration.
On Nov. 9, 2001, Verizon Wireless Inc. filed an updated registration statement with the Securities and Exchange Commission.
Under the revised agreement announced today, Price Communications will contribute all of its wireless business assets, including 41 company-owned retail stores, a regional call center in Atlanta and network infrastructure. Currently Price Communications operates under the Cellular One brand in the Southeast. After the closing, the business will adopt the Verizon Wireless brand and become part of the Verizon Wireless South Area, headquartered in Alpharetta, Georgia.
The transaction is contingent upon approval by Price Communications shareholders.
About Verizon Wireless
Verizon Wireless is the largest wireless communications provider in the U.S. with more than 28.7 million wireless voice and data customers. The coast-to-coast wireless provider was formed by the combination of the U.S. wireless businesses of Verizon Communications (NYSE:VZ) and Vodafone (NYSE and LSE: VOD). Verizon Wireless has a footprint covering more than 90 percent of the U.S. population, 49 of the top 50 and 97 of the top 100 U.S. markets. The company, headquartered in Bedminster, NJ, is 40,000 employees strong. Reporters and editors can find more information about the company on the Web at http://www.verizonwireless.com.