Alaska Communications (NASDAQ:ALSK) and General Communication, Inc. (“GCI”) (NASDAQ:GNCMA) today announced the companies have completed the previously announced transaction to form The Alaska Wireless Network, LLC (“AWN”).
Alaska Communications and GCI, leading wireless providers in Alaska, have each contributed their respective wireless assets, including spectrum licenses, cell sites, backhaul facility usage rights, and other assets necessary for AWN to design, build, and operate a statewide wireless network. From the start, AWN’s network will cover more of Alaska’s population than the network of any other wireless provider. AWN will provide the latest wireless services, including LTE, to its owners, Alaska Communications and GCI. Alaska Communications and GCI will independently sell these services to their respective retail customers and continue to operate as competitors in Alaska.
“The wireless business is capital intensive, requires scale to compete successfully against national carriers, and demands more spectrum than either of our two companies individually owns,” said Alaska Communications President and CEO Anand Vadapalli and GCI President and CEO Ron Duncan. “By combining our respective wireless assets, we can provide a state-of-the-art Alaska wireless network owned and operated by Alaskans for Alaskans. We believe that The Alaska Wireless Network will provide the fastest, most geographically extensive, and most reasonably priced wireless services for Alaska subscribers, allowing us each to compete more effectively in the retail market.”
Under the transaction, Alaska Communications owns one third and GCI owns two thirds of AWN. Under the terms of the agreement, Alaska Communications will receive $100 million cash and is eligible to receive preferred distributions totaling up to $190 million over the first four years of operation. GCI will receive all remaining available distributions over the first four years. Distributions thereafter will be on a pro rata ownership basis.Evercore acted as financial advisor to Alaska Communications, with The Stephens Group providing an additional fairness opinion.
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