(By Balaseshan) Telecom giant AT&T Inc. (NYSE: T) has agreed to buy U.S. retail wireless operations, operated under the Alltel brand, of Atlantic Tele-Network Inc. (NASDAQ: ATNI) for about $780 million in cash.
Under terms of the agreement, AT&T will acquire wireless properties, including licenses, network assets, retail stores and about 585,000 subscribers.
The acquisition includes spectrum in the 700 MHz, 850 MHz and 1900 MHz bands and is largely complementary to AT&T's existing network, the company said.
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The wireless operations to be acquired generated operating income estimated to be about $34 million, which is net of depreciation and amortization expense of about $42 million, for the first nine months of 2012. ATNI currently operates a retail CDMA network for its subscribers in these areas.
AT&T expects integration costs for network conversion from CDMA will not result in significant dilution to EPS or impact to cash flow.
The transaction is expected to close in the second half of 2013.
Following the completion of the transaction, Atlantic Tele-Network's businesses will consist of Commnet, serving rural communities primarily in the Southwest U.S.; Sovernet, serving residential and business customers in New England; ION, serving rural communities in New York State; among others.
T closed Friday's regular session at $33.44, while ATNI ended at $39.37.