ALLTEL Announces Merger Agreement With Liberty Cellular in Kansas.

LITTLE ROCK, Ark., June 22 /PRNewswire/ -- ALLTEL (NYSE: AT) today announced a definitive merger agreement with Liberty Cellular, Inc., a privately held communications company that offers wireless, paging, long- distance and Internet services in Kansas.

Under terms of the agreement, the stock of Liberty, which operates under the name Kansas Cellular, and its affiliate, KINI L.C., will be exchanged for a total of 7,000,000 shares of ALLTEL common stock, which represents a transaction value of about $600 million. The transaction will be accounted for as a pooling-of-interests.

"The merger of ALLTEL and Liberty Cellular is a natural extension of ALLTEL's geographic communications footprint," said Joe T. Ford, ALLTEL chairman and chief executive officer.

The merger will connect ALLTEL's Missouri properties and the soon-to-be- acquired Aliant Communications properties in Nebraska. The transaction includes 100 percent of the 15 cellular rural service areas in Kansas and all or part of 100 of the state's 105 counties.

"The merger," Ford said, "joins two companies which share a history of excellent customer service and a commitment to the values and financial vitality of rural America. Quality customer care and technologically advanced communications services are key ingredients to success for both companies."

Clarke Garnett, Liberty president and chief executive officer, said the merger is a "win-win-win situation for the customers, the communities Liberty now serves and both companies. ALLTEL has a history of providing quality communications services and recognizes the importance of being a good corporate citizen in all of its markets."

Ford said, "This merger is indicative of ALLTEL's strategy of delivering a variety of communications services across its own facilities in geographically focused areas." ALLTEL has been involved in more than 260 mergers and acquisitions in the past three decades.

Liberty's communications operations consist of the following:

-- 150,000 customers;

-- A state-of-the-art wireless digital network with more than 1,350 miles

of fiber optic cable;

-- Dedicated long-distance and Internet access services;

-- 10 company-operated sales locations;

-- 136 cellular sites; and

-- 90 paging transmission sites.

From a standpoint of size, the merged company will have:

-- $6 billion in annual revenues;

-- More than $9 billion in assets

-- 6.6 million communications customers in 25 states*;

-- More than 24,000* employees worldwide; and

-- More than 825 company-operated sales locations.

* Statistics include the Aliant Communications merger

Ford cited Liberty management as "forward-thinking" and praised the company's "level of customer service and retention of customers throughout Kansas. The excellent reputation of Liberty in all of its local communities has resulted in a loyal customer base."

The merger is subject to state and federal regulatory and appropriate shareholder approval and should be completed this fall.

Following a transition period, the merged company will market its products under the ALLTEL brand.

Kansas Cellular, with headquarters in Salina, operates the state's largest cellular telephone system. With 35 percent more coverage than all other competitors combined, the company is the total communications source for the state, offering paging, digital PCS (personal communications service), Internet and long-distance services.

ALLTEL is a customer-focused, information technology company that provides wireline and wireless communications and information services.