labels: m&a, at&t, telecom
AT&T to acquire Dobson Communications for $2.8 billion news
30 June 2007

Mumbai: The largest US wireless carrier, AT&T Inc, yesterday agreed to acquire rural wireless provider Dobson Communications Corp for $2.8 billion in cash, on the same day that Apple Inc.''s iPhone was introduced in the market, for which AT&T is the sole carrier.

Dobson''s chairman Everett Dobson noted that the acquisition by AT&T was the only way for Dobson''s customers to have access to the device.

The offer translates to $13 per share and represents a 17-per cent premium over Dobson''s closing price yesterday of $11.11 on the Nasdaq Stock Exchange. Including debt, the deal is worth a total of about USD 5.1 billion.

Since 1990 the Oklahama-based Dobson has provided roaming services to AT&T. The acquisition will add Dobson''s 1.7 million customers who subscribe to its Cellular One brand in rural and suburban markets in 17 states to its own nearly 62 million subscribers.

Stan Sigman, the president and chief executive of AT&T''s mobility group, said Dobson''s network and technology would fit almost perfectly with the company''s existing network.

Analysts have often questioned how much larger carriers can grow in the US wireless market that is already said to be saturated. AT&T is still completing its integration of BellSouth Corp. and the old AT&T''s long distance business - two major acquisitions in the last couple of years.

AT&T chief executive Randall Stephenson, who took over earlier this month as chief executive, has said AT&T will be a wireless-centred company in the future. The announcement of Dobson deal came at the close of Stephenson''s first board meeting as the chief executive.

The company also said the acquisition would have only minimal effect on the expected earnings per share for the year and would have a positive and growing effect on earnings and cash flow in the second year after the deal closes.

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AT&T to acquire Dobson Communications for $2.8 billion