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AT&T to buy T-Mobile USA for about $39 billion
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AT&T to buy T-Mobile USA for about $39 billion
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NEW YORK (Reuters) - AT&T Inc said on Sunday it would buy Deutsche Telekom AG's T-Mobile USA, in a $39 billion cash-and-stock transaction that would create a new industry behemoth by combining two of the four largest U.S. wireless carriers.
The...
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The at&t logo is seen at their store in Times Sqaure in New York April 21, 2010.
Credit: Reuters/Shannon Stapleton
NEW YORK |
Sun Mar 20, 2011 4:03pm EDT
NEW YORK (Reuters) - AT&T Inc said on Sunday it would buy Deutsche Telekom AG's T-Mobile USA, in a $39 billion cash-and-stock transaction that would create a new industry behemoth by combining two of the four largest U.S. wireless carriers.
The purchase price includes a cash payment of $25 billion with the balance to be paid using AT&T common stock. AT&T has the right to increase the cash portion of the purchase price by up to $4.2 billion.
As part of the deal, Deutsche Telekom will get about 8 percent stake in AT&T, and a Deutsche Telekom representative will join the AT&T board. AT&T can increase the cash component so long as Deutsche Telekom receives at least a 5 percent equity stake in it.
The agreement has been approved by the boards of both companies.
AT&T said it would finance the cash portion with new debt and cash on AT&T's balance sheet. AT&T has an 18-month commitment for a one-year unsecured bridge term facility underwritten by JPMorgan Chase & Co for $20 billion.
AT&T will not assume any debt from T-Mobile USA or Deutsche Telekom.
AT&T said the deal is expected to be accretive to earnings, excluding non-cash amortization and integration costs, in the third year after closing.
The deal is expected to close in about 12 months.
(Reporting by Paritosh Bansal and Maria Aspan; Editing by Marguerita Choy)
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Comments (2)
PwlM wrote:
That should be stopped on antitrust grounds.
Mar 20, 2011 3:25pm EDT -- Report as abuse
Vertigo wrote:
If ever there was a deal that should be blocked by government regulators it is this one. The proposed Sprint_T-mobile merger would have provided a third competitor to oppose the present AT&T/Verizon Duopoly. T-mobile was the low cost provider, rates are destined to increase should this merger be approved. After this only one merger remains (Verizon AT&T) until we return to a Ma Bell monopoly, except that now they are, relatively speaking, totally unregulated.
Mar 20, 2011 3:47pm EDT -- Report as abuse
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