updated 11/21/2005 12:44:53 PM ET 2005-11-21T17:44:53

Sprint Nextel Corp. said Monday it will acquire Alamosa Holdings Inc., its largest Sprint-branded wireless affiliate, for $3.4 billion.

Alamosa shareholders will receive $18.75 per share, a 15 percent premium from the stock’s Friday close of $16.26. The deal also includes the assumption of $900 million in debt.

Alamosa, based in Lubbock, Texas, sells Sprint-branded services in 19 states and has 1.48 million subscribers.

Sprint Nextel is based in Reston, Va., but has an operational headquarters in Overland Park, Kan.

The acquisition still must be approved by Alamosa shareholders and regulatory officials. Sprint Nextel said it expected to close the deal in the first quarter of next year.

Alamosa is the fourth affiliate Sprint Nextel has acquired since Sprint Corp. bought Nextel Partners Inc. in August for $35 billion to form the nation’s third-largest wireless company.

So far, the company has acquired three Sprint-branded affiliates: U.S. Unwired Inc. for $1.3 billion; Baton Rouge, La.-based Gulf Coast Wireless for $287.5 million; and IWO Holdings Inc. of Albany, N.Y., for $427 million.

Several of the Sprint affiliates filed suit against that company as it prepared for the Nextel acquisition over the summer, saying Sprint’s sale of Nextel-branded products would violate the company’s agreement not to compete with the affiliates in their territories.

In conference calls with analysts and in interviews, Sprint Nextel Chief Executive Officer Gary Forsee had said the company was trying to negotiate new deals with its affiliates. But Alamosa officials said during an earnings call two weeks ago that a new deal was unlikely.

Sprint Nextel is also scheduled to purchase Nextel Partners Inc., its largest affiliate, next year. The two companies are locked in a battle over that affiliate’s value, and a Delaware Chancery Court judge recently ruled that ongoing appraisals must be made public.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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