AT&T to Acquire T-Mobile for $39bn, In a Stock and Cash Deal

About one hour ago, AT&T announced it has reached a definitive agreement to acquire T-Mobile for $39-billion in a cash and stock deal.

Under the terms of the deal, AT&T will pay $25-billion in cash, and the remaining $14-billion in stock to T-Mobile parent company Deutsche Telekom.

The $14-billion worth in AT&T equity will give Deutsche Telekom about 8-percent ownership in AT&T.

 AT&T says the acquisition would see an improvement in service for consumers on both networks given an improvement in network quality. The AT&T network will be accessible to about 95-percent (more than 294-million people) of the U.S. population, according to the company. Additionally, AT&T will increase coverage of its new 4G Long Term Evolution (LTE) network.

The new infrastructure that AT&T has acquired, including cell sites, would have taken AT&T about five years on average to build the same level of infrastructure if the acquisition had not taken place.

AT&T will gain about 46.5-million new subscribers as a direct result of the acquisition.

“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.

Deutsche Telekom Chairman and CEO René Obermann said in a statement today, “I am confident that AT&T is the best partner for our customers, shareholders and the mobile broadband ecosystem.

AT&T will host a live conference call Monday at 8AM Eastern Time to discuss the acquisition. You could listen live to the conference call by visiting the AT&T Investor Relations website at that time.

Various financial intermediaries, including the New York City-based investment bank, J.P. Morgan Chase, advised both companies on the deal.

The AT&T stock (NYSE:T) closed up nearly 10 basis points last Friday to $27.94 per share. We’ll know on Monday how the markets reacted to the acquisition when trading resumes.