Verizon Wireless has agreed to acquire Rural Cellular, a mobile telephone service provider focused on rural areas in the U.S., the companies announced Monday.

Verizon will pay about $2.67 billion in cash and assume the smaller carrier's debt, Verizon said in a news release. Rural Cellular, which markets its service under the Unicel brand, serves about 716,000 customers in 15 states in New England, the Plains states, the Southeast, and the Pacific Northwest.

The acquisition will help Verizon Wireless expand its presence in rural areas, said Ivan Seidenberg, chairman and CEO of parent company Verizon Communications.

"This is an asset we had under surveillance for awhile," Seidenberg said during a news conference. The acquisition should be "very attractive for Verizon shareholders."

The acquisition will expand Verizon's coverage area by a population of 4.7 million, the company said.

Rural Cellular, based in Alexandria, Minnesota, uses both the CDMA (Code Division Multiple Access) and GSM (Global System for Mobile Communications) technologies. Verizon Wireless plans to deploy CDMA service in Rural Cellular's existing GSM markets and convert the GSM customers to CDMA service.

Verizon plans to maintain Rural Cellular's existing GSM networks to serve the roaming needs of other GSM carriers' customers, the company said.

The acquisition has been approved by the boards of both companies, but it is subject to regulatory approval and Rural Cellular's shareholders. Verizon expects the deal to close in the first half of 2008.

Holders of Rural Cellular's common stock would receive $45 per share in cash, under the deal. The sale price is a 41 percent increase over the closing price of $31.88 on Friday.