Liberty Latin America Ltd. announced it has entered into a definitive agreement to acquire AT&T Inc.’s wireless and wireline operations in Puerto Rico and the U.S. Virgin Islands, in an all-cash transaction valued at $1.95 billion.
“This strategic and complementary acquisition is an exciting and unique opportunity to expand our business in one of our best markets,” said Balan Nair, president of Liberty Latin America.
“The combination of AT&T’s leading mobile businesses with Liberty Puerto Rico’s leading high- speed broadband and TV business will create a strong and competitive integrated communications player, with a combined annual revenue of over $1.2 billion in Puerto Rico and $4.6 billion across Liberty Latin America,” he said.
The transaction is subject to customary closing conditions, including reviews by the Federal Communications Commission and the U.S. Department of Justice.
The companies expect the transaction to close in the second quarter of 2020. For the moment, both companies will continue to operate separately, Liberty executives said.
After the acquisition, AT&T will support Liberty Latin America for a period of up to 36 months, to enable an efficient transition of services, said Naji Khoury, president of Liberty Puerto Rico.
“Following the acquisition, customers from AT&T will continue to benefit from free roaming services between Puerto Rico, the U.S. Virgin Islands, the mainland United States, Canada and Mexico,” he said.
“Liberty Latin America will continue providing leading enterprise services for AT&T’s retained global business customers and support AT&T’s FirstNet program for first responders in Puerto Rico and the U.S. Virgin Islands,” he added.
In terms of business customers, AT&T’s assets will provide consumer mobile and B2B services in Puerto Rico and the USVI, excluding DIRECTV customers.
“In Puerto Rico, which represents approximately 90% of the revenue of the assets to be acquired, AT&T’s business is the leading provider of mobile services with the fastest network and a strong spectrum position, in addition to a well invested fiber backhaul network,” Liberty said.
Liberty Latin America intends to finance the $1.95 billion acquisition (plus fees and expenses) through a combination of $2.2 billion in borrowings on the combined assets and Liberty Puerto Rico (including refinancing $922.5 million in existing term loans at Liberty Puerto Rico) and the remaining approximately $750 million from Liberty Latin America’s committed liquidity of $2 billion at June 30, 2019.
Liontree LLC and Credit Suisse are acting as financial advisors to Liberty Latin America on the transaction.