Telecommunications giant AT&T Inc. on Sunday evening agreed to purchase wireless carrier T-Mobile USA, in a deal worth $39 billion in cash and stock.
If approved, AT&T, which is currently the nation’s No. 2 wireless carrier behind Verizon Communications Inc.’s Verizon Wireless, would leap into the top position with a combined customer base of 130 million subscribers.
AT&T’s proposed acquisition will be paid with $25 million in cash and $14 billion in AT&T shares. The deal will yield 8 percent ownership of the combined company to Deutsche Telekom AG, the parent of T-Mobile USA.
T-Mobile, long rumored to be on the block to be sold, will be merged with a company that shares similar wireless technology—both AT&T and T-Mobile are wireless carriers running GSM technology. Over the past several months, T-Mobile has been rumored to be seeking a tie-up with No. 3 wireless carrier Sprint Corp., which runs on a different technology.
“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, in a statement on March 20.
“Our common network technology makes this a logical combination and provides an efficient path to gaining the spectrum and network assets needed to provide T-Mobile customers with 4G LTE and the best devices,” commented Deutsche Telekom Chairman Rene Obermann in a statement.
The deal faces significant regulatory hurdles, as any marriage of the nation’s No. 2 and No. 4 wireless carriers would be closely scrutinized by antitrust regulators. It remains to be seen how the combination would affect consumer pricing of wireless plans.
AT&T’s merger may also be a boon for Apple Inc., which presumably will gain access to T-Mobile’s 30 million customers.
If approved, AT&T, which is currently the nation’s No. 2 wireless carrier behind Verizon Communications Inc.’s Verizon Wireless, would leap into the top position with a combined customer base of 130 million subscribers.
AT&T’s proposed acquisition will be paid with $25 million in cash and $14 billion in AT&T shares. The deal will yield 8 percent ownership of the combined company to Deutsche Telekom AG, the parent of T-Mobile USA.
T-Mobile, long rumored to be on the block to be sold, will be merged with a company that shares similar wireless technology—both AT&T and T-Mobile are wireless carriers running GSM technology. Over the past several months, T-Mobile has been rumored to be seeking a tie-up with No. 3 wireless carrier Sprint Corp., which runs on a different technology.
“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, in a statement on March 20.
“Our common network technology makes this a logical combination and provides an efficient path to gaining the spectrum and network assets needed to provide T-Mobile customers with 4G LTE and the best devices,” commented Deutsche Telekom Chairman Rene Obermann in a statement.
The deal faces significant regulatory hurdles, as any marriage of the nation’s No. 2 and No. 4 wireless carriers would be closely scrutinized by antitrust regulators. It remains to be seen how the combination would affect consumer pricing of wireless plans.
AT&T’s merger may also be a boon for Apple Inc., which presumably will gain access to T-Mobile’s 30 million customers.
