SAN FRANCISCO (KCBS) – AT&T has announced that they have reached an agreement to acquire T-Mobile USA from Deutsche Telekom in a cash-and-stock transaction for approximately $39 billion.

“This transaction represents a major commitment to strengthen and expand critical infrastructure for our nation’s future,” said AT&T Chairman and CEO Randall Stephenson. “It will improve network quality, and it will bring advanced Long Term Evolution capabilities to more than 294 million people.”

By acquiring T-Mobile, it would help AT&T to commit to a significant expansion of 4G LTE deployment to 95 percent of the U.S. population, as T-Mobile does not have a clear path to deliver LTE.

The deal, approved by the Board of Directors of both companies, would allow Deutsche Telekom to receive an equity stake in AT&T. The purchase price will include a cash payment of $25 billion with the balance to be paid using AT&T common stock.

KCBS Technology Analyst Larry Magid:

KCBS Technology Analyst Larry Magid said the merger will be relatively smooth from a technology standpoint, as both AT&T and T-Mobile use GSM (Global System for Mobile communications) technology.

He said the deal with help AT&T because it is an instant upgrade to their network. But he’s not sure if it will be positive for T-Mobile users, who could see a more crowded network and higher prices.

The acquisition is still subject to regulatory approvals, a reverse breakup fee in certain circumstances and customary regulatory and other closing conditions. The transaction is expected to close in approximately 12 months.

(© 2011 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

Comments (3)
  1. Tristan Thomas says:

    This makes me really sad. I wonder how the different manufactures will react to this. More carriers produced more phones which produced more options. So to see T-Mobile go is sad.

    However, its not all bad. T-Mobile issued a statement regarding the acquisition.

    In the statement they gave a few of the common questions they were asked and answer to them regarding the buy out. You can check it out here:

  2. Harpreet singh says:

    AT&T has bad service and customer service bad all time record and If the tmobile gets this then I’m no more customer for Att and tmobile Att I’m going with metro pcs then

  3. Jaroslav says:

    I am happy with AT&T in the US, but not happy with T-Mobile in EU, so it should be good news for T-Mobile clients.

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