AT&T (NYSE: T) and Verizon Wireless (NYSE: VZ) are swapping assets to comply with regulators who said the two must divest some properties as part of their recent acquisitions. The two separate deals consist of: AT&T buying assets from Verizon Wireless for $2.35 billion in cash and Verizon Wireless buying certain assets from AT&T worth $240 million. Releases here and here.
AT&T was required to dispose of some assets after it agreed to purchase Centennial Communications in November 2008. Verizon Wireless will gain network assets and 120,000 subscribers in five areas. Likewise, Verizon Wireless was required to sell some overlapping assets after purchasing Alltel (NYSE: AT). AT&T will gain assets in 79 areas and 1.5 million subscribers.
AT&T will have to convert the Verizon Wireless assets over to GSM, which it expects will take about a year and will result in an additional capital investment of about $400 million over 2009 and 2010.