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Bellevue-based T-Mobile USA to be Acquired by AT&T in $39B Transaction

T-Mobile USA, the Bellevue-based, U.S. wireless division of Deutsche Telekom AG, will be acquired by AT&T, both companies announced Sunday. It will operate under the name AT&T after acquisition closes in a year.

AT&T and Bellevue-based T-Mobile USA's parent company, Deutsche Telekom of Germany, announced today that AT&T will purchase T-Mobile for $39 billion in cash and stock. AT&T says that it will continue to keep a "strong" employee presence in Bellevue.

When the transaction is completed, pending U.S. regulatory approval, the T-Mobile name will be retired and the company will operate under AT&T.

The acquisition was made for $25 billion in cash for T-Mobile USA, in addition to $14 billion in AT&T shares, according to Deutsche Telekom's press release. This would give Deutsche Telekom ownership interest of 8 percent and a representative of the Germany-based telecommunications company will join the AT&T board of directors.

The acquisition is subject to U.S. regulatory approvals and the transaction is expected to close in approximately 12 months, according to AT&T's press release.

In a Q&A for customer questions, T-Mobile says that until the acquisition is closed, T-Mobile will continue to operate independently from the larger company. T-Mobile reports that it will not offer the iPhone, which is currently offered through Verizon and AT&T.

According to Dallas-based AT&T, the company plans to continue to keep a "strong employee and operations base in the Seattle area."

According to T-Mobile, 37,795 people work for T-Mobile, though how many are located in its headquarters in south Bellevue is was not listed.

AT&T currently has about 96 million wireless subscribers, nearly triple T-Mobile's 34 million subscribers. The combined revenue of the two companies in 2010 is $80 billion.

AT&T reports that this acquisition will help it develop its 4G LTE network.

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

Deutsche Telekom reports that the transaction will allow it to reduce its debt by 13 billion euros, or 31 percent, and concentrate on its European network.

"We have achieved the best solution for our company, our customers and shareholders," said René Obermann, CEO Deutsche Telekom, in a prepared statement. "This will strengthen our position in Europe, whilst we are still participating in the rapidly growing business of mobile data."

Earlier this month, the Wall Street Journal reported that had been exploring a merger.

AT&T's statement on its workforce

In a message to the public regarding the acquisition, AT&T posted the following regarding the workforce:

An impressive, combined workforce
Bringing AT&T and T-Mobile USA together will create an impressive workforce that is best positioned to compete in today’s global economy. Post-closing, AT&T intends to tap into the significant knowledge and expertise held by employees of both AT&T and T-Mobile USA to succeed. AT&T is the only major U.S. wireless company with a union workforce, offering leading wages, benefits, training and development for employees. The combined company will continue to have a strong employee and operations base in the Seattle area.

Nick Pirce March 21, 2011 at 02:31 AM
Wow, so AT&T bought out TMobile for $39Billion
Tim Jack March 21, 2011 at 05:36 AM
AT&T to buy T-Mobile. Sure didn't see that one coming. I spent too many years with AT&T enjoying bad connections and dropped calls and spending too much before switching to T-mobile with great customer service. Stink!
Jan Stout March 21, 2011 at 04:10 PM
This is horrible! We have wonderful service, accurate billing from a great local company! I too escaped ATT 5 years ago and switched to T-Mobile. They have provided great service, without a single billing mistake. The minute ATT takes over, I am out of here! I will not tolerate such rude, greedy and incompetent service from ATT again! Once again, a huge corporation has taken over a smaller company that valued their customers. Customers lose every time this happens! And this sale looks lke we are verging on a monpoly in the cell business. Where are the governmnt regulators when we need them!??

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