Expanded Network and Service, Synergy Opportunity
Rural Cellular’s network served 716,000 customers as of March 31, 2007, spread across five regional territories. Its networks are located in the states of Maine, Vermont, New Hampshire, New York, Massachusetts, Alabama, Mississippi, Minnesota, North Dakota, South Dakota, Wisconsin, Kansas, Idaho, Washington, and Oregon.

Rural Cellular utilizes both CDMA and GSM technology separately across its five regional markets. Verizon Wireless plans to deploy CDMA service in Rural Cellular’s existing GSM markets and convert the GSM customers to CDMA service. Verizon Wireless, however, anticipates maintaining Rural Cellular’s existing GSM networks to continue serving the roaming needs of other GSM carriers’ customers.

Verizon Wireless expects to realize more than $1 billion in synergies in reduced roaming and operations expenses. The addition of the new markets will also offer the company additional upside growth opportunities.

Deal Terms
Under terms of the agreement, approved by the boards of both companies, holders of Rural Cellular’s common stock will receive $45 per share in cash for a total equity price of $757 million on a fully diluted basis. Including net debt as of the first quarter of 2007, the total transaction value is approximately $2.67 billion. The $45 price per share represents a 16 percent premium to the average closing price over the last 10 trading days and a 41 percent premium to the last closing price of $31.88 on Friday, July 27, 2007.

The acquisition, which is subject to governmental and regulatory approval and approval of Rural Cellular’s shareholders, is expected to close in the first half of 2008.

Rural Cellular Corporation was advised on the transaction by Bear, Stearns & Co., Skadden Arps Slate Meagher & Flom LLP and Falkenberg Capital. Verizon Wireless was advised by JPMorgan Chase & Co. and Debevoise & Plimpton LLP.