Analysts have speculated that TPG and Goldman may have wanted to sell Alltel because of tight capital markets.
"I'm sure the private equity investors that bought Alltel a while back would be glad to get Alltel off their balance sheet," said Yvonne Bishop, assistant portfolio manager at Summit Investment Partners, which owns Verizon shares.
"All of the investment banks have constrained balance sheets right now and they need to free up their capital. Alltel was bought at a pretty heady time in the credit market. Investment banks in general have been trying to move debt commitments off their balance sheets," she said.
Verizon Wireless and Alltel, which has more than 13 million customers, together would have more than 80 million customers. AT&T, currently the biggest U.S. wireless service, said it ended the first quarter with about 71 million customers.
Alltel serves 57 primarily rural markets that Verizon Wireless does not serve, Verizon Wireless said. They both use a common network technology.
"We took a risk that, rather than overpaying, there would be a better day," said Verizon Communications Chief Executive Ivan Seidenberg about why the company is buying Alltel now rather than last year. He said he approached the private equity owners about the deal in April.
Verizon Wireless said Morgan Stanley acted as financial adviser for the deal and is providing bridge financing. Citibank, Goldman Sachs and RBS advised the sellers, it said.
Verizon Communication shares were up $1.90, or 5.1 percent, at $38.90 on the New York Stock Exchange, while Vodafone shares rose 5.3 pence, or 3.5 percent, to 160 pence in London.