Sprint Nextel Corp. (S) said Monday it will acquire Alamosa Holdings Inc. (APCS), its largest Sprint-branded wireless affiliate, for $3.4 billion.

Alamosa shareholders will receive $18.75 per share, a 15 percent premium from the stock's Friday close of $16.26. The deal also includes the assumption of $900 million in debt.

Alamosa, based in Lubbock, Texas, sells Sprint-branded services in 19 states and has 1.48 million subscribers. It reported $1.2 billion in revenue last year.

Sprint Nextel is based in Reston, Va., but has an operational headquarters in Overland Park, Kan.

The acquisition still must be approved by Alamosa shareholders and regulatory officials. Sprint Nextel said it expected to close the deal in the first quarter of next year.

Alamosa is the fourth affiliate Sprint Nextel has acquired since Sprint Corp. bought Nextel Communications Inc. in August for $35 billion to form the nation's third-largest wireless company.

So far, the company has acquired three Sprint-branded affiliates: U.S. Unwired Inc. for $1.3 billion; Baton Rouge, La.-based Gulf Coast Wireless for $287.5 million; and IWO Holdings Inc. of Albany, N.Y., for $427 million.

Several of the Sprint affiliates, including Alamosa, filed suit against that company as it prepared for the Nextel acquisition over the summer, saying Sprint's sale of Nextel-branded products would violate the company's agreement not to compete with the affiliates in their territories. As part of Monday's deal, Alamosa agreed to set aside its lawsuit.

In conference calls with analysts and in interviews, Sprint Nextel Chief Executive Officer Gary Forsee had said the company was trying to negotiate new deals with its affiliates. But Alamosa officials said during an earnings call two weeks ago that a new deal was unlikely.

Sprint Nextel is also scheduled to purchase Nextel Partners Inc., its largest affiliate, next year. The two companies are locked in a battle over that affiliate's value, and a Delaware Chancery Court judge recently ruled that ongoing appraisals must be made public.

Greg Gorbatenko, a telecommunications analyst with Atlanta-based Jackson Securities, said the price of the Alamosa deal was in line with other recent telecom acquisitions and shouldn't affect the Nextel Partners appraisals.

Gorbatenko also said he expects Sprint Nextel to eventually buy the remaining six Sprint affiliates.

"They're just cleaning house," he said.

Bank of America Equity Research analyst David Barden estimated in a research note Monday that it would cost $2.7 billion to buy the remaining Sprint affiliates and require assuming $525 million in debt. He also agreed that the Alamosa deal's value "does not represent a new high water mark in private market wireless valuation and is roughly in line with Nextel Partners' current valuation."

Sprint Nextel shares rose 28 cents, or 1.1 percent, to $25.22 in afternoon trading on the New York Stock Exchange. The stock has traded in a 52-week range of $21.57 to $27.20. Alamosa shares rose $2.10, or 13 percent, to $18.36 on the Nasdaq Stock Market, at the high end of a 52-week range of $10.41 to $18.41.