BEDMINSTER, N.J. (AP) _ Verizon Wireless acquired the cellular telephone operations of Price Communications Wednesday for $1.15 billion.
Verizon, the nation's largest wireless provider with nearly 29 million customers, on Wednesday said it had updated an agreement it had made with Price last year that was canceled when Verizon failed to go ahead with an initial public offering of its stock.
The November 2000 deal between the two companies had been contingent upon the IPO, which has now been postponed until next year. Verizon Wireless was formed by the combination of the U.S. wireless businesses of Verizon Communications and Vodafone PLC.
Price Communications Wireless, which operates under the Cellular One brand name, serves more than 560,000 customers in Georgia, Alabama, South Carolina and Florida.
Price and Verizon agreed to form a limited partnership of Price's cellular business and some Verizon Wireless assets, which would be controlled by Verizon, the companies said. Verizon will also assume $550 million in debt.
Price would contribute all of its wireless assets, including 41 retail stores, a regional call center in Atlanta and some network infrastructure. The business will adopt the Verizon Wireless brand name and become part of the Verizon Wireless South area in Alpharetta, Ga., the companies said.
Under the deal, Price would be able to exchange its stake in the partnership for Verizon shares up to 60 days after the IPO or one year after the partnership, whichever comes first. Price would be able to exchange its partnership for Verizon Communications stock, for between $40 to $74 a share, if the IPO doesn't occur in four years.
Shareholders and regulators must still approve the deal.
In early afternoon trading on the New York Stock Exchange, Price was down $1.14, or 6 percent, at $18.76. Verizon Communications rose 43 cents, or 1 percent, to $48.48.
The previous agreement called for an exchange of stock but was conditioned upon the completion of Verizon Wireless' initial public offering. Volatile market conditions that pounded the share prices of rival telephone companies postponed the IPO.
Verizon Wireless said it expects to close the deal with Price during the second quarter of 2002.