Wireless giant Vodafone AirTouch PLC has agreed to acquire CommNet Cellular Inc. of the U.S. for US$764 million in cash, extending its cellular coverage to new areas of the Western United States, the companies said this week.
Terms of the acquisition, to be made through Vodafone's AirTouch Cellular subsidiary, also require it to assume about $600 million of CommNet debts. CommNet shareholders will receive $31 per share in cash. The transaction is expected to close in four to five months, the firms said.
Vodafone AirTouch was formed in January, when the U.K.'s Vodafone Group PLC snapped up AirTouch Communications Inc. of San Francisco in a $56 billion transaction. [See "U.K.'s Vodafone Gets AirTouch for $56 Billion," Jan. 15.]The purchase will extend AirTouch Cellular's coverage to include Rapid City and Sioux Falls, South Dakota; Sioux City, Iowa; Bismark, North Dakota; Great Falls and Billings, Montana; and Pueblo, Colorado.
AirTouch Cellular currently fills gaps in its coverage using costly "roaming" agreements with other providers. The acquisition is aimed at cutting down on the cost of those roaming agreements, the company said.
AirTouch Cellular serves about 9 million cellular customers in the U.S. in 25 states. Vodafone AirTouch has mobile operations in 25 countries and serves more than 28 million cellular customers.
CommNet offers service in most of Colorado, as well as Montana, North Dakota, South Dakota, Utah and Wyoming, as well as parts of Idaho, Iowa and New Mexico. The company's share of these markets gives it access to 3.6 million potential customers; it currently serves about 360,000.
The deal is subject to customary conditions, including approval from the U.S. Federal Communications Commission.