AT&T's Bold Acquisition of T-Mobile Comes with Multiple Risks

AT&T and T-Mobile logos

News

On 20 March 2011, AT&T and Deutsche Telekom announced an agreement under which AT&T would acquire T-Mobile USA in a cash-and-stock transaction totalling $39 billion. Under the terms of the proposed deal, Deutsche Telekom will receive a $25 billion cash payment, and the balance in AT&T common stock. This equates to an ownership stake in AT&T of approximately 8 percent. Deutsche Telekom's equity position would decrease if AT&T exercises a provision to increase the cash portion of the transaction by $4.2 billion. A Deutsche Telekom representative will also be appointed to AT&T's board of directors.

Should the agreement be terminated, AT&T will pay Deutsche Telekom $3 billion and transfer an undisclosed amount of spectrum to T-Mobile USA. The transaction will be subject to approval from the US Department of Justice and the Federal Communications Commission (FCC), which regulate antitrust and public interest policy issues respectively. The companies expect the transaction will close within 12 months.


Please login or register to view the full article

Login using the panel in the left-hand menu or click here if your company already has a subscription to the CCS Insight Hotline to activate your account.

If you are interested in a subscription the the CCS Insight Hotline please complete the form below and a member of the CCS Insight sales team will contact you.

Start Registration