AT&T (T) Announces $39 Billion Acquisition of T-Mobile USA
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Sunday afternoon, AT&T (NYSE: T) announced an agreement to acquire T-Mobile USA from Deutsche Telekom in a deal valued at approximately $39 billion in cash and stock.
AT&T is paying $25 billion in cash with the remainder in AT&T common stock. The cash portion could be increased up to $4.2 billion, which would decrease the stock component, so long as Deutsche Telekom receives a minimum of 5 percent equity.
As part of the massive deal, AT&T said there would significant expansion to its 4G LTE network to cover 95 percent of the US population. AT&T said the deal will increase its infrastructure investment in the US by more than $8 billion over seven years.
"This transaction delivers significant customer, shareowner and public benefits that are available at this level only from the combination of these two companies with complementary network technologies, spectrum positions and operations," stated Randall Stephenson, AT&T Chairman and CEO. "We are confident in our ability to execute a seamless integration, and with additional spectrum and network capabilities, we can better meet our customers' current demands, build for the future and help achieve the President’s goals for a high-speed, wirelessly connected America."
AT&T sees synergies with a run rate of more than $3 billion, three years after closing going forward.
The companies see the transaction closing in approximately one year.
AT&T is paying $25 billion in cash with the remainder in AT&T common stock. The cash portion could be increased up to $4.2 billion, which would decrease the stock component, so long as Deutsche Telekom receives a minimum of 5 percent equity.
As part of the massive deal, AT&T said there would significant expansion to its 4G LTE network to cover 95 percent of the US population. AT&T said the deal will increase its infrastructure investment in the US by more than $8 billion over seven years.
"This transaction delivers significant customer, shareowner and public benefits that are available at this level only from the combination of these two companies with complementary network technologies, spectrum positions and operations," stated Randall Stephenson, AT&T Chairman and CEO. "We are confident in our ability to execute a seamless integration, and with additional spectrum and network capabilities, we can better meet our customers' current demands, build for the future and help achieve the President’s goals for a high-speed, wirelessly connected America."
AT&T sees synergies with a run rate of more than $3 billion, three years after closing going forward.
The companies see the transaction closing in approximately one year.
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