As first rumored yesterday, Verizon (NYSE: VZ) is acquiring Alltel (NYSE: AT) equity and debt in a transaction worth $28.1 billion. Release.

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Verizon Wireless issued a press release just moments ago, detailing the transaction between itself and it’s minority owner Vodafone (NYSE: VOD) and Alltel, which once completed will make it the largest U.S. wireless operator. Verizon will purchase Alltel from private-equity partners TPG Capital and GS Capital Partners, for about $5.9 billion in cash and will assume Alltel’s debt, which is estimated to be $22.2 billion, making the total transaction value $28.1 billion. The deal is expected to close by the end of the year, pending regulatory approvals. Rumors of the merger cropped up yesterday, however, the timing of the deal is surprising. Alltel was always a potential buy-out candidate for Verizon because they used the same network technology, but why now? One might suspect that Verizon was increasingly resigned to the fact that it was never going to catch-up to AT&T (NYSE: T), which has a runaway hit in selling Apple’s (NSDQ: AAPL) iPhone. Together, Verizon Wireless and Alltel will have 80.2 million subscribers, surpassing AT&T’s 71.4 million customer base.

Verizon Wireless and Alltel both use CDMA, which will make integrating the two companies’ networks easier, and more efficient. It was earlier this year that AT&T commented on how smoothly the merger between Cingular and AT&T Wireless went because they shared a common technology called GSM. Likewise, critics have been harsh and quick to point out that the merger between Sprint (NYSE: S) and Nextel Communications failed because the two companies didn’t share a common technology.

Verizon said once the deal closes, customers at both companies will have access to more products and services. Verizon said it expects to expand the in-network calling to the combined customer base. It will also offer Alltel customers advanced services, such as over-the-air downloadable music and a nationwide network since today Alltel only operates in 57 primarily rural markets. Alltel will also join Verizon’s 4th-generation path to LTE, and participate in its Open Development Initiative.