Verizon has announced it has signed an agreement to acquire Straight Path Communications for $3.1 billion (£2.41bn) – almost double the amount AT&T ventured when it announced its intent to buy the spectrum holder last month.
The company had been the subject of a bidding war since AT&T announced its acquisition intention on April 11, with Straight Path giving cryptic updates on new bids. On April 25, the company announced a new bid from a ‘multi-national telecommunications company’ totalling $1.8bn, followed by another bid on May 3 for $2.3bn, and then another on May 8 for $3.1bn.
Verizon confirmed theirs was the final bid late yesterday in a statement, with Straight Path also confirming its termination of the AT&T agreement. Verizon, on behalf of Straight Path, will pay a termination fee of $38 million to AT&T.
“Verizon now has all of the pieces in place to quickly accelerate the deployment of 5G,” said Hans Vestberg, executive vice president and president of global network and technology at Verizon. “Combined with our recent transactions with Corning Incorporated, XO Communications, and Prysmian Group, this is another step to build the next-generation network for our customers.”
The reason why Straight Path has forced such a furious bidding war is through its spectrum portfolio. Even though, as Bloomberg’s Tara Lachapelle puts it, “we don’t exactly know its value because 5G isn’t a reality yet, so it’s worth what a buyer is willing to pay for it”, the company holds 868 FCC spectrum licenses providing wireless coverage across the US, as well as millimetre wave spectrum configured for 5G services. “We can provide a next generation solution for the networks of the future,” the company notes on its spectrum page.
Elsewhere, Sprint has also made strides in its 5G strategy, announcing a collaboration with Qualcomm and SoftBank in a short missive issued on Wednesday. This comes after T-Mobile announced its plans at the start of this month for ‘truly’ nationwide 5G, with the usual name-calling and putdowns one would expect from CEO John Legere.
Debevoise & Plimpton LLP acted as legal counsel for Verizon in connection with the Straight Path transaction.
