AT&T to Acquire T-Mobile

As you may have already heard, AT&T, Inc. has entered a definitive agreement to acquire Deutsche Telekom AG’s T-Mobile USA for $39 billion.

This deal is expected to take about 12 months to complete, as there are regulatory approvals and such that have to first be addressed. In this deal, Deutsche Telekom AG will be receiving $25 billion in cash and the difference of $14 billion in shares of AT&T stock.

However, according to the AT&T press release, AT&T has the right to increase the cash portion of their payment up to $4.2 billion, while reducing the amount of stock shares that will be given to Deutche Telekom AG, as long as Deutche Telekom AG receives a five percent equity ownership interest in AT&T, Inc.

With the purchase of T-Mobile, AT&T customers should see improvements in their service, such as the quality of calls, as AT&T will have a broader spectrum and will also gain a number of cell sites, which were previously owned by T-Mobile.

According to AT&T, the company will be gaining the equivalent of what would take five or more years to build, had they not been purchased from T-Mobile. These cell towers should increase the density of AT&T’s network by about 30 percent in some of its most populated areas, without the need to build additional cell towers.

It will be interesting to see how the acquisition of T-Mobile by AT&T, Inc. will affect the other cell phone service providers in the United States, such as Verizon and Sprint.

For more information about AT&T’s acquisition of Deutsche Telekom AG’s T-Mobile USA, you should check out both AT&T’s official press release and and T-Mobile’s press release on the subject. Also, this article from Yahoo! News provides some information on this, so you may want to check it out, as well.

What do you think of this acquisition and what do you think will happen with the other cell phone service providers? Please feel free to leave a comment below with your opinions!


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