AT&T to Acquire T-Mobile in $39B Deal with Deutsche Telekom

AT&T to Acquire T-Mobile

Telecom giant AT&T announced in a statement that they have entered into an agreement with Deutsche Telekom to purchase T-Mobile. The agreement, which has been approved by the board of directors from each company, is valued at about $39 billion.

The price consists of a cash payment of $25 billion with the remainder being paid from AT&T common stock in the amount of about an 8% ownership. The amount of stock shares is subject to adjustment by AT&T provided that Deutsche Telekom will maintain a minimum of 5% ownership of AT&T.

One of the driving factors for the acquisition is the ability for AT&T to obtain the additional spectrum it needs to meet growing consumer demand for increased mobile broadband bandwidth.

Additionally, AT&T has committed to significantly expanding the installation of  4G LTE (Long Term Evolution) technology. The new platform will be made available to 95 percent of Americans. This expansion will includ rural communities and small towns which is in line with the Federal Communications Commission (FCC) and President Obama’s goals to connect “every part of America to the digital age.”

“This transaction represents a major commitment to strengthen and expand critical infrastructure for our nation’s future,” said Randall Stephenson, AT&T Chairman and CEO. “It will improve network quality, and it will bring advanced LTE capabilities to more than 294 million people. Mobile broadband networks drive economic opportunity everywhere, and they enable the expanding high-tech ecosystem that includes device makers, cloud and content providers, app developers, customers, and more. During the past few years, America’s high-tech industry has delivered innovation at unprecedented speed, and this combination will accelerate its continued growth.” 

Both companies expect the combined companies to be able to improve service quality for U.S. wireless customers almost immediately because both companies use the same type of network for communications. “At closing, AT&T will immediately gain cell sites equivalent to what would have taken on average five years to build without the transaction, and double that in some markets.  The combination will increase AT&T’s network density by approximately 30 percent in some of its most populated areas, while avoiding the need to construct additional cell towers.” AT&T said in a statement.  

Source: AT&T