Alltel this week said it will spin off its wireline business and merge it with Valor Communications Group in a transaction valued at about $9.1 billion, based on Valor\u2019s closing stock price as of Dec. 8.The combination creates a wireline carrier focused on the rural U.S. and will reposition the remaining Alltel as a pure-play wireless service provider with roughly 11 million customers in 34 states. The spin-off and merger with Valor will create a new wireline company located in Central Arkansas, with Alltel shareholders owning 85% of the combined entity.Valor, based in Irving, Texas, will issue approximately 400 million shares of stock to the shareholders of Alltel in exchange for the Alltel wireline business. Current Alltel shareholders will continue to own 1 share of the remaining wireless entity and will receive 1.05 shares of Valor stock for each share of Alltel they currently own.In addition, Valor Communications will assume approximately $4.2 billion in additional debt.\u00a0Management teams drawn from Alltel will lead the wireless and wireline businesses.The combined wireline operations will be about a $3.4 billion business with 3.4 million customers in 16 states. It will have net debt of about $5.4 billion.The company initially will locate its headquarters in facilities currently owned by Alltel and will seek a permanent location.The transaction is expected to close by mid-2006.Alltel says the separation of the wireless and wireline businesses is part of its strategic push to grow its domestic wireless business. During the year, Alltel has purchased Western Wireless, certain assets of Cingular and Public Service Cellular. The company also has agreed to acquire Midwest Wireless.Alltel will remain the nation\u2019s fifth-largest wireless carrier with about 11 million customers in 34 states, and annual revenue of about $7.5 billion. Alltel said it will also remain the largest independent roaming partner to the top four wireless carriers.Alltel's plans mirror those of CLEC XO Communications which last month spun off its wireline operations to focus on fixed broadband wireless service to businesses and service providers.