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AT&T Buys T-Mobile USA - BWOne.com

3,993 views · Published 20 March 2011 · 2:17 · Indexed 25 September 2026

Channel: BWOne · 2011 · Science & Technology

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Deuctshe Telekcom the parent company of T-Mobile has agreed to sell T-Mobile USA to AT&T for $39 billion in cash and stock. 

It will break down to $25 million in cash and $14 million in stock that will give the parent company Deuctshe Telekcom a 8% stake in T-Mobile. The combined deal is said to take about 12 months to get through all the red tape but when combine will make a user base of about 130 million people and they will have created a de facto monopoly on GSM in the US. AT&T also claims that this will help expand its LTE footprint to about 95% of the US or about 294 million people. 

T-Mobile while has not been the biggest company or largest network was always one of the top companies when it came to customer service while AT&T has struggled in this aspect. What will this mean for the new Sidekick 4G, G2X or the G-Slate? They will probably launch as normal but does make you think about the future of such devices. 

Mergers of large companies like this usually mean prices will stay the same or raise, layoffs will occur and less competition out there for growth of the market in general.  We've seen big telecom mergers happen in the past with AT&T Wireless, Cingular then AT&T and Cingular and Sprint and Nextel which never went that smooth and prices either remained the same or raised.  But it  may end up going ok and in a quieter way like Verizon and Alltel deal went if you remember that it happened? That's right most don't as they kept that as quiet as possible to keep the transition going smooth.  We shall see soon enough where all this will end up.


Press Release:

Deutsche Telekom: US Deal accelerates own transformation


Dallas, Texas and Bonn, Germany — Mar. 20, 2011 PDT

Deutsche Telekom to receive 39 billion USD for US-business  
Deutsche Telekom to have up to 8 percent stake in the leading US telecommunications company  
AT&T takes over US mobile business from Deutsche Telekom  
Deutsche Telekom will receive 25 billion USD in cash and 14 billion USD in AT&T shares  
Attractive multiple of 7.1 times 2010 adjusted EBITDA  
Deutsche Telekom plans to use approximately 5 billion EUR for share buybacks  
Deutsche Telekom net debt is planned to be reduced by approximately 13 billion EUR or 31 percent
Deutsche Telekom will take an approximately 8 percent stake in US telecommunication company AT&T. At the same time Deutsche Telekom will hand over 100 percent ownership of T-Mobile USA to AT&T. This has been agreed by the boards of the two companies today. AT&T will pay 25 billion USD in cash for T-Mobile USA, in addition to 14 billion USD in AT&T shares. AT&T has the right to increase the portion of the purchase price paid in cash by up to 4.2 billion USD with a corresponding reduction in the stock component. The value of the transaction will be 39 billion USD. This will amount to an attractive multiple of approximately 7 times 2010 adjusted EBITDA. The merger still needs US regulatory approval. The closing of the transaction is expected to be completed in first half of 2012.

René Obermann, CEO Deutsche Telekom: "We have achieved the best solution for our company, our customers and shareholders. This will strengthen our position in Europe, whilst we are still participating in the rapidly growing business of mobile data. We will be able to focus more on the opportunities of a modern infrastructure in Germany and Europe, as well as in Internet products that accompanies to our strategy "fix, transform and innovate". Following our initiatives of finding a solution for our activities both in the United Kingdom and Poland, we have with this transaction nearly accomplished the "fix" part of our strategy. We will now focus our resources more on the "transform" and "innovate" blocks of our strategy in order to accelerate the transformation of Deutsche Telekom."


Full press release available at  http://newsroom.t-mobile.com/articles/att-acquires-tmobile-USA

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