Verizon must divest some assets in bid for Rural Cellular

By Lisa Kerner

Charlotte, N.C., June 10 - Verizon Communications Corp. must divest assets in six geographic areas in Vermont, New York and Washington in order to move forward with Verizon Wireless' $2.7 billion acquisition of Rural Cellular Corp., the Department of Justice ruled.

The department said that the transaction as originally proposed would have "substantially lessened competition to the detriment of consumers of mobile wireless telecommunications services in those areas," according to a Verizon news release.

It was also reported that the department's Antitrust Division filed a civil lawsuit Tuesday in U.S. District Court for the District of Columbia to block the proposed transaction.

However, the department filed a proposed consent decree at the same time that, if approved, would resolve the department's competitive concerns and the lawsuit, the release stated.

In October, Rural Cellular shareholders approved the proposed acquisition of the company by Verizon Wireless that was first announced on July 30, 2007.

When the merger is completed, Rural Cellular's common stockholders will be entitled to receive $45 per share in cash, for a total equity price of $757 million on a fully diluted basis.

Verizon Wireless is a wireless voice and data network based in Basking Ridge, N.J.

Rural Cellular, located in Alexandria, Minn., provides wireless communication services under the Unicel brand.

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