AT&T has agreed to buy T-Mobile USA from Deutsche Telekom AG for $39 billion in cash and stock.
The deal, announced Sunday, combines the No. 2 and No. 4 wireless companies in the U.S. to create the largest provider with 129 million subscribers, surpassing Verizon.
The agreement has been approved by the boards of directors of both companies.
The companies said AT&T’s acquisition of T-Mobile USA “provides an optimal combination of network assets to add capacity sooner than any alternative, and it provides an opportunity to improve network quality in the near term for both companies’ customers.”
In the past, AT&T has been criticized in consumer surveys for inconsistent iPhone service.
The companies said customers will see service improvements — including improved voice quality — as a result of additional spectrum, increased cell tower density and broader network infrastructure. When the deal closes, AT&T will immediately gain cell sites equivalent to what would have taken an average five years to build without the transaction, the news release said.
The companies said the merger also will provide “a fast, efficient and certain solution to the impending exhaustion of wireless spectrum in some markets, which limits both companies’ ability to meet the ongoing explosive demand for mobile broadband.”
The deal is subject to regulatory approvals. The companies expect it to close in about 12 months.
The deal may give Deutsche Telekom an 8 percent stake in AT&T, which will add a Deutsche Telekom executive to its board of directors, Bloomberg News writes.
AT&T is based in Dallas, but its cell unit, AT&T Mobility, is Atlanta-based.
- Henry Unger, The Biz Beat
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