Germany's dominant telecommunications carrier, Deutsche Telekom AG, is making a further move into the US wireless market.
The company, which is in the process of acquiring Voicestream Wireless Corp., announced Sunday the signing of a deal to acquire Powertel Inc., a regional wireless operator in the southeastern US, for $US5.9 billion. The German company will also assume Powertel debt of $US1.2 billion, it said in a statement.
The deal has already been blessed by major shareholders in Powertel.
Powertel's network, which is based on the GSM (Global System for Mobile Communications) standard widely used in Europe and also by Voicestream, covers 12 southeastern states. The area, home to 25 million people, is not serviced by Voicestream, so the deal expands Deutsche Telekom's reach in the US market, giving it coverage of 250 million people and operations in 24 out of the 25 largest markets in the US, said the carrier.
As of June 30, Powertel had 727,000 customers and year-to-date revenues of $US212.3 million, said the statement.
Under the terms of the deal, Powertel shareholders will receive 2.6353 Deutsche Telekom shares for each share of Powertel common stock. Based on the closing price of Deutsche Telekom shares in Frankfurt on Friday, the deal values each Powertel share at $US105.36 -- a nearly $US20 premium on the Friday closing price of $US86 5/8.
Deutsche Telekom said the deal is expected to close immediately after its acquisition of Voicestream closes. Should the latter deal fail, Voicestream separately has also signed a deal to acquire Powertel.