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Alltel plans to buy owner of Cellular One

Cellular giant Alltel Corp. said Monday that it is buying Western Wireless Corp. in a $4.4-billion cash and stock deal expected to make it the fifth-largest U.S. wireless company.

The deal, which shifts the Cellular One brand to Alltel, is the latest example of the Arkansas company's strategy of building market share through less populated parts of the nation. Western Wireless of Bellevue, Wash., has about 1.4-million U.S. wireless customers in 19 Western and Midwestern states that are contiguous to Alltel's existing properties, chiefly in the South and West.

Should the acquisition be approved by shareholders, the Little Rock company would have $10-billion in overall revenue and coverage of a vast share of the rural United States with 10-million wireless customers in 33 states.

The purchase would also give Alltel an international component. Western Wireless has 1.6-million customers in six foreign countries, mostly in Austria and Ireland.

In trading Monday, Western Wireless shares surged 85 cents, or 2.3 percent, to close at $37.37 on the Nasdaq Stock Market _ a new 52-week high, but well below the $39.25 per share at which the Alltel deal valued them, according to Friday's closing price.

Alltel shares slipped $1.37, or 2.4 percent, to finish at $54.75 on the New York Stock Exchange. The stock has traded in a 52-week trading range of $47.25 to $60.62.

The deal marks the latest consolidation in the competitive wireless phone service industry.

Last month, Sprint Corp. agreed to buy Nextel Communications Inc., the fifth-biggest U.S. wireless provider, for $35-billion in an agreement that would fortify Sprint's position as the nation's third-largest wireless service provider behind Cingular Wireless and Verizon Wireless.

Rick Black, an analyst with Blaylock & Partners L.P., said the purchase of Western Wireless should help Alltel protect its wireless position, as well as its business as a provider of roaming services to other national wireless carriers.

He also said the agreement could be a harbinger of more deals to come.

Alltel said the purchase would give it coverage over one-fourth of Americans and half the area of the continental 48 states _ and make it "a leading independent regional roaming partner" for the four top wireless carriers.