The board of directors of AT&T Wireless selected Cingular Wireless as the winning bidder to acquire the company for $41 billion in cash. Shareholders of AT&T Wireless will receive $15 cash per common share. Cingular will also assume $6 billion in debt. giving the transaction a full value of $47 billion. Funding requirements for SBC will be approximately $25 billion and for BellSouth, approximately $16 billion. SBC’s and BellSouth’s proportionate equity stake in Cingular will remain unchanged following the transaction, with SBC holding 60% and BellSouth 40%of the equity. Management control will remain 50-50.
The combination of Cingular Wireless and AT&T Wireless will create the largest GSM/GPRS network in the U.S. with spectrum in 49 states. Cingular currently has 24 million customers and AT&T Wireless has 22 million subscribers. Cingular operates 21,800 cell sites (of which 94% have GSM coverage as of Q4 2003) and AT&T Wireless has 25,300 cell sites. Annual revenues of the combined company would exceed $32 billion.
Cingular expects to achieve significant operating synergies through this acquisition by consolidating networks, distribution, billing, procurement, marketing, advertising and other functions. The company expects to generate more than $1 billion in operating expense and capital expenditure savings in 2006, and in excess of $2 billion in annual savings beginning in 2007. http://www.cingular.comhttp://www.attwireless.com
