Thursday, September 29

Mobile to offload wireline business to Cogent, expects $1 bln pre-tax charge


Article content

T-Mobile US Inc said on Wednesday it had agreed to sell its wireline business to Cogent Communications Holdings Inc in a deal that would also see T-Mobile provide some services to Cogent for a fee.

The purchase price was not disclosed. T-Mobile said it expected to record a pre-tax charge of about $1 billion in the third quarter of 2022, to cover for the carrying value of the wireline business and a liability for the contractual payments of the transaction.

Article content

T-Mobile and Cogent did not immediately respond to a Reuters’ request for comment on the deal value.

Article content

Cogent will acquire T-Mobile’s fiber and related assets and certain liabilities associated with the business, helping it bolster its offering to consumers and enterprises, it said in a statement.

Once the transaction is closed, the parties will enter into a separate agreement pursuant to which Cogent will offer certain services to T-Mobile for $700 million, to be paid in tranches.

The deal will go through a newly formed direct subsidiary of Cogent, which said it did not plan to issue new debt or equity to finance the acquisition.

Cogent added that the deal was not expected to be dilutive to its existing stockholders, and that the company would continue to maintain its current dividend plan. (Reporting by Yuvraj Malik in Bengaluru; Editing by Anil D’Silva and Milla Nissi)



financialpost.com

Leave a Reply

Your email address will not be published.