Deutsche Telekom has agreed to sell T-Mobile USA to AT&T for USD 39 billion in cash and shares. AT&T will pay USD 25 billion in cash and USD 14 billion in shares, or 7.1 times adjusted EBITDA for 2010, making the German operator the largest shareholder in AT&T with an 8 percent stake and a seat on the board. The deal provides a significant boost to AT&T's spectrum holdings and network coverage, as well as adding 38 million new subscribers, pushing it ahead of Verizon to first place on the US mobile market. AT&T said it expects to realise USD 3 billion in synergies form the acquisition within three years of closing, and the takeover should add to earnings from the third year. Pro forma for 2010, the transaction increases AT&T's total mobile revenues from USD 58.5 billion to nearly USD 80 billion, or 80 percent of the group's total revenues. AT&T said the deal will help it take LTE to 95 percent of the US population, including another 46.5 million customers it would not have reached without T-Mobile. Pending regulatory approval, the companies expect to close the deal in the first half of 2012. Deutsche Telekom said it will use the proceeds of the sale for repurchasing shares (EUR 5 billion) and paying off debt (EUR 13 billion).
