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HomeBiz TechVerizon Outbids AT&T To Buy Straight Path For More Than $3B: 5G Race Heating Up : TECH : Tech Times

Verizon Outbids AT&T To Buy Straight Path For More Than $3B: 5G Race Heating Up : TECH : Tech Times

Verizon had a bidding war with AT&T over Straight Path Communications and it just sealed the deal, acquiring the company for more than $3 billion.

More specifically, Verizon outbid AT&T and agreed to pay $184 per share in an all-stock transaction, amounting to $3.1 billion in total. The bidding war started when AT&T offered $95.63 per share, but Verizon raised and AT&T folded.

Verizon Outbid AT&T

“[T]he Straight Path board of directors determined, in good faith, after consultation with its financial advisors and outside legal advisors, that the transaction with Verizon constituted a Superior Proposal under the AT&T Merger Agreement,” explains Straight Path. “AT&T informed Straight Path that after much deliberation, it has determined not to make any new bids or proposals to Straight Path or to propose any amendments to the AT&T Merger Agreement.”

The all-stock transaction should qualify as a tax-free reorganization, says Straight Path. The company adds that Verizon will pay AT&T a $38 million termination fee on behalf of Straight Path. The transaction received approval from both Verizon’s and Straight Path’s boards of directors.

Verizon 5G Network

This could give Verizon a significant edge in the 5G race, as it could go a long way toward building 5G networks. Upon bidding for Straight Path, AT&T mentioned that it plans to use it to achieve its 5G goals. Verizon is expected to take advantage of Straight Path for similar purposes.

Straight Path has a vast pool of 28 GHz and 39 GHz mmWave spectrum for mobile communications, which Verizon could use to get a head start in the 5G competition. While 4G networks have generally proved fast and reliable, 5G is expected to take things to the next level with even faster downloads. At the same time, 5G should also bolster products such as self-driving cars, which rely on an internet connection.

Moreover, 5G networks should also be able to support more applications including augmented reality and virtual reality, smart cities, and more.

Straight Path Spectrum

Straight Path’s trove of spectrum licenses have long appealed to telecoms and should play a major part in setting up 5G networks. As a reminder, Straight Path started looking for a buyer back in January of this year, after the FCC slapped it with a $100 million fine for “spectrum squatting,” which means failing to deliver the wireless services that its spectrum licenses required.

The licenses cover 40 markets across the United States and the FCC had already approved those frequencies to fuel the next-generation wireless service.

The 5G race is gradually heating up as the big players start making their moves, but don’t expect a real 5G deployment anytime soon. AT&T said that it would launch a “5G Evolution Network” this year, but it’s basically fake 5G to keep the ball rolling until true 5G is ready to hit the scene. T-Mobile, meanwhile, recently announced plans to launch a true nationwide 5G network by 2020, mocking AT&T’s fake 5G network.

Verizon has made its own efforts toward 5G deployment and with Straight Path now under its belt, it might just win the race.




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(Via TechTimes)