AT&T agreed to acquire T-Mobile USA from Deutsche Telekom for $39 billion of combined cash and stock. According to AT&T, the acquisition provides the network assets necessary to add capacity, and it will offer the carrier an opportunity to improve network quality for customers of both AT&T and T-Mobile. With the acquisition, AT&T plans to significantly expand its 4G network to 95% of the U.S. population, including rural areas.
While the boards of both companies have already approved the deal, regulatory approval of the acquisition is still pending. Deutsche Telekom will have an 8% stake in AT&T, and a representative from the company will be on AT&T's board of directors. The transaction, which is expected to close in about a year, will make AT&T the largest cell phone carrier, larger than both Sprint and Verizon.