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AT&T to buy T-Mobile USA

AT&T Inc. (ATT-N26.210.010.04%) said Sunday it would buy Deutsche Telekom AG’s T-Mobile USA, in a $39-billion cash-and-stock transaction that would create a new industry behemoth by combining two of the four largest U.S. wireless carriers...

As part of the deal, Deutsche Telekom will get about 8 per cent stake in AT&T, and a Deutsche Telekom representative will join the AT&T board... The agreement has been approved by the boards of both companies.

AT&T to buy T-Mobile USA | Reuters

But the world's largest deal announced so far this year, which will bump Verizon Wireless from its No. 1 U.S. position, could raise the ire of U.S. consumers and regulators as analysts expect it to result in wireless service price increases. Consumers currently look to T-Mobile USA for some of the best value wireless service rates.

The transaction will increase AT&T's U.S. market share to an estimated 43 percent from 32 percent, putting it well ahead of Verizon Wireless's current 34.5 percent share of U.S. mobile customers, according to Tolaga Research estimates. AT&T will add 34 million customers to its current 96 million subscriber list.

As a sign of AT&T's confidence the deal will pass regulatory muster, it agreed to pay an unusually high breakup fee of $3 billion and to give T-Mobile USA wireless airwaves if regulators reject it. But they may be over-confident...