RESTON, Va.-After months of negotiations, Sprint Nextel Corp. reached an agreement to acquire its largest CDMA affiliate, Alamosa Holding Inc., for $4.3 billion, including the assumption of $900 million in debt.

Under terms of the Alamosa deal, Sprint Nextel will purchase Alamosa's common stock at $18.75 per share in an all-cash transaction. The price was a 14-percent premium over Alamosa's Monday opening price of $16.17 per share. Alamosa's stock surged on the news to $18.39 per share before trading was halted on the stock.

The acquisition of Alamosa will add approximately 1.5 million direct wireless subscribers in 242 service areas in 19 states.

Sprint Nextel noted the purchase price represents a 9.8 times projected 2006 adjusted operating income before depreciation and amortization. The deal is expected to close early next year.

"This acquisition closes a long partnership with the management and shareholders of Alamosa," said Gary Forsee, president and chief executive officer of Sprint Nextel. "As the largest PCS affiliate, we appreciate their efforts over the years to grow Sprint's business and we look forward to continuing a strong relationship with their customers. This transaction will significantly expand our direct customer base and territory, and will provide additional value for our shareholders."

Sprint Nextel's stock was trading up 21 cents per share early Monday at $25.15 per share.

The agreement closes a contentious issue between Sprint Nextel and Alamosa. Alamosa initiated legal proceedings against Sprint Nextel following Sprint Corp.'s acquisition of Nextel Communications Inc. on Aug. 12. Alamosa claimed the acquisition violated terms of its affiliate agreement.

Alamosa bolstered its network holdings earlier this year when it acquired fellow affiliate AirGate PCS Inc. for $630 million. In addition to acquiring AirGate's operations, Alamosa also picked up AirGate's more comprehensive affiliate agreement, which prevented Sprint from offering wireless service using any licensed spectrum in AirGate's service areas. Alamosa's agreement only prevented Sprint from offering service using the 1.9 GHz spectrum band. Analysts noted this was significant as Nextel's iDEN network uses spectrum in the 800 MHz spectrum bands, and the AirGate exclusivity provision prevented Sprint Nextel from marketing Sprint-branded iDEN services in Alamosa's markets.

"We are pleased to accept Sprint's offer to acquire our company," said Alamosa Chairman and CEO David Sharbutt. "We have enjoyed a successful business relationship with Sprint that has benefited both companies. Our shareholders and employees can be proud of our results and the value that we have created in Alamosa."

Sprint Nextel has already acquired a handful of its CDMA affiliates, including US Unwired Inc. for $1.3 billion, IWO Holdings Inc. for $427 million and Gulf Coast Wireless L.P. for $287.5 million. Sprint Nextel is moving through an appraisal process with affiliate Nextel Partners Inc. to determine a price to acquire the 68 percent of its largest affiliate it does not already own.