AT&T To Buy T-Mobile USA for $39 Billion

21 Mar 2011 | T-Mobile , att | 0 comments


att t-mobile mergerBad news for all those iPhone users who switched to T-Mobile to get away from AT&T. Deutsche Telekom has agreed to sell T-Mobile USA to AT&T for $39 billion in cash and stocks. The German telecommunications company will receive $25 billion in cash and $14 billion in stocks. It will also get 8% equity stake in AT&T and a seat in the board of directors. In 2001, Deutsche Telekom bought VoiceStream for $24 billion, which was later renamed to T-Mobile USA.

If approved by the FCC, the new entity would become the largest in the US, combining AT&T's 95 million users with T-Mobile's 34 million for a total of 130 million customers. As part of the merger, AT&T committed to expand its 4G network 1.2 million square miles, which would make it accessible to and additional 46.5 million users.

The transaction, which AT&T expects to close in 12 months, will face intense regulatory scrutiny. As a sign of confidence, AT&T agreed to pay T-Mobile a $3 billion breakup fee among other contingencies, according to the deal terms.