Verizon Alltel 80 Step - Acquisition of 80% of a firm's...

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Acquisition of 80% of a firm's common stock Verizon Communications Inc. and Alltel Inc. Let's say that instead of a full acqusition, Verizon acquired 80% of Alltel's outstanding stock. Verizon would pay 80% of total market value ($5,925 x 80% = $4,740) for the stock purchase. The process is similar; differences from the 100% acquisition are highlighted in gold. (All numbers are in $ millions.) Verizon Alltel Alltel Assets Book Values Book Values Fair Values Current assets Cash and cash equivalents 582 1,053 1,053 Short-term investments 1,492 Accounts receivable, net 11,584 1,079 1,004 Inventories 2,216 474 508 Prepaid expenses and other 2,122 195 195 Total current assets 17,996 2,801 2,760 Plant, property and equipment 212,605 5,869 Less accumulated depreciation (127,450) (800) Net Plant, property and equipment 85,155 5,069 3,513 Wireless licenses 60,423 5,439 9,444 Goodwill 5,218 Other intangible assets, net 4,974 3,414 2,391 Other assets 26,880 17,961 18,797 Total assets 200,646 34,684 36,905 Liabilities and Shareowners’ Investment Current liabilities Debt maturing within one year 9,331 340 323 Accounts payable and accrued liabilities 13,299 1,221 1,169 Other liabilities 7,270 328 341 Total current liabilities 29,900 1,889 1,833 Long-term debt 33,778 23,320 24,448 Employee benefit obligations 29,246 - Deferred income taxes 22,202 5,200 5,032 Total liabilities 115,126 30,409 31,313 Non-controlling interests 34,633 Shareowners’ investment Common stock 297 5 Contributed capital 40,291 4,541 Reinvested earnings (deficit) 18,958
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Verizon Alltel 80 Step - Acquisition of 80% of a firm's...

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