DALLAS (dpa-AFX) - AT&T Inc. (T) said Tuesday it has agreed to acquire the U.S. retail wireless operations of Atlantic Tele-Network Inc. (ATNI) for $780 million in cash, which is expected to enhance its wireless coverage in rural areas.
The deal is anticipated to close in the second half of 2013, subject to review by the U.S. Federal Communications Commission and the Justice Department.
The U.S. retail wireless operations of Atlantic Tele-Network operates under the Alltel brand. The deal would enable AT&T acquire wireless properties, including licenses, network assets, retail stores and about 585,000 subscribers.
The network being acquired covers about 4.6 million people in mostly rural areas in the states of Georgia, Idaho, Illinois, North Carolina, South Carolina and Ohio, and generated revenues of about $350 million for the first nine months of 2012.
Atlantic Tele-Network currently operates a retail CDMA network for its subscribers in these areas, and the spectrum being acquired is complementary to AT&T's existing network. AT&T expects integration costs for network conversion from CDMA will not result in significant dilution to EPS or impact cash flow.
Atlantic Tele-Network meanwhile said it will the use of the after-tax proceeds of the deal towards new acquisitions, a possible reduction in debt, investments in existing businesses, and payment of dividend.
AT&T last Thursday said it will take a fourth-quarter non-cash pre-tax charge of about $10 billion related to 'actuarial gains and losses on pension and post-employment benefit plans. The company also said that its results for the quarter will be negatively impacted by higher than expected damages due to Superstorm Sandy.
AT&T is trading at $33.50, up 0.18%, on a volume of over 8 million shares on the NYSE.
Atlantic Tele-Network is trading at $43.49, up 10.46%, on the Nasdaq.
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