AT&T said late Friday that it has agreed to purchase regional wireless and wireline communications company Centennial Communications for $2.8 billion in cash and assumed debt.
The deal will broaden AT&T’s wireless coverage especially in rural areas of the country—many of Centennial’s 1.1 million wireless customers are located in largely rural locales in the Midwest and Southeast portions of the country as well as in Puerto Rico and the U.S. Virgin Islands. AT&T, in contrast, has about 75 million wireless customers in the U.S.
As part of the deal, Centennial shareholders will receive $8.50 in cash for every share of Centennial stock they own for a total of about $944 million. Including debt, the total value of the transaction will be about $2.8 billion. AT&T said in a statement that it hopes to close the deal by the end of the second quarter of next year.
“Mobility is a vital investment area for AT&T and our company's biggest growth driver,” said AT&T Mobility and Consumer Markets CEO Ralph de la Vega in a statement. “This transaction enhances network coverage for our consumer and business customers and is expected to create long-term value for AT&T's stockholders.”
Centennial used to own cable operations in Puerto Rico, but sold them to private equity firm Hicks, Muse, Tate & Furst in 2004 for an estimated $155 million. Centennial is based in Wall, N.J.
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