Verizon Wireless has entered into an agreement with Alltel Corporation and Atlantis Holdings LLC, an affiliate of private investment firm TPG Capital and GS Capital Partners, to acquire Alltel Corporation in a cash merger. Verizon Wireless is a joint venture of Verizon Communications (NYSE: VZ) and Vodafone (NYSE and LSE: VOD).

Under the terms of the agreement, Verizon Wireless will acquire the equity of Alltel for approximately $5.9 billion. Based on Alltel’s projected net debt at closing of $22.2 billion, the aggregate value of the transaction is $28.1 billion.

The parties are targeting completion of the merger by the end of the year, subject to obtaining regulatory approvals.

“This move will create an enhanced platform of network coverage, spectrum and customer care to better serve the growing needs of both Alltel and Verizon Wireless customers for reliable basic and advanced broadband wireless services,” said Lowell McAdam, Verizon Wireless president and chief executive officer.

Alltel serves more than 13 million customers in markets in 34 states. This includes 57 primarily rural markets that Verizon Wireless does not serve. The transaction puts the Alltel markets and customers on a path to advanced 4th generation services as Verizon Wireless deploys LTE technology throughout its network over the next several years. Alltel’s customers also will reap the benefits of Verizon Wireless’ Open Development initiative, which welcomes third-party devices and services to use the Verizon Wireless network.