AT&T and Deutsche Telekom AG today announced that AT&T will acquire T-Mobile USA from Deutsche Telekom in a transaction worth US$39 billion (about US$25 billion in cash and the balance in AT&T common stock). Both Boards of Directors have approved the transaction but the deal still needs to go through the usual regulatory approvals. The deal is expected to take up to 12 months to close.
AT&T expects that the T-Mobile acquisition will benefit it by giving it T-Mobile’s over 33 million customers and providing it with additional spectrum bandwidth, increased cell tower density and broader network infrastructure. For example, it will gain cell sites that will increase its network density by some 30 percent in some of its most populated areas. The move will also lead to a much wider 4G LTE network deployment with an additional 1.2 million square miles now in its future coverage area.
“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.”
The merger will leave the US with three major carriers (AT&T, Sprint and Verizon).