AT&T Wireless to acquire remaining TeleCorp markets

AT&T Wireless will acquire the remaining 77% of its largest affiliate, TeleCorp PCS, in an all-stock transaction worth $4.7 billion, which includes $2.1 billion in net debt and about $221 million in preferred securities.

Both companies’ boards have approved the transaction. Provided TeleCorp PCS’ shareholders, the FCC and the Department of Justice follow suit, the transaction is expected to close in the first half of 2002.

During a conference call with the media, AT&T Wireless Chairman and CEO, John Zeglis called the acquisition “the most strategic move we could make to enhance shareholder value.”

“We can comfortably fit this company into our balance sheet, and there’s room for additional investments,” he said.

AT&T Wireless had been looking to increase its footprint. This will allow AT&T Wireless to build out its GSM/GPRS network seamlessly in certain territories.

The resources TeleCorp PCS now will have in terms of GSM/GPRS will allow it to move forward in a timely manner as well, said CEO Jerry Vento, who is expected to retain CEO status once the acquisition is official.

With TeleCorp, AT&T Wireless will be adding markets that cover about 32 million people in 14 states. It will cover 16 of the top 100 U.S. markets and eight of the top 50 markets.

“This is a company that is well-known to us. We were there at its creation,” Zeglis said. In addition, it helps to fortify AT&T Wireless’ spectrum position, he said.

“We feel good with our spectrum needs. We have enough spectrum to go to GSM, GPRS and EDGE in virtually all of our markets,” Zeglis said.

Zeglis said the spectrum controversy surrounding NextWave has not caused AT&T Wireless to delay any of its buildout plans. Although the carrier may require additional spectrum to build to UMTS in all of its top markets, it maintains that, with its affiliates, it is in a position today to build to UMTS in more than 70 of its markets.