AT&T Sells Puerto Rico and the U.S.
Virgin Islands Operations to Liberty Latin America for $1.95B
plans to sell its wireless and wireline operations in Puerto Rico and
the U.S. Virgin Islands to Liberty Latin America. The transaction
includes network assets, including spectrum; real estate and leases;
customers, including 1.1 million wireless subscribers; and contracts. At
close, approximately 1,300 current AT&T employees will move to Liberty
Latin America. To ensure a smooth transition for its customers, AT&T
will provide certain transition support functions to Liberty Latin
America following close of the transaction. Under terms of the
agreement, AT&T will retain FirstNet responsibilities and relationships
as well as DIRECTV and certain global business customer relationships.
The sale does not affect AT&T's FirstNet commitment. AT&T retains its
dedicated FirstNet network core and service capabilities. Among other
services, post-close Liberty Latin America will support AT&T's FirstNet
build in Puerto Rico and the U.S. Virgin Islands, expanding LTE coverage
and capacity to best meet the needs of first responders in the region.
Eligible first responders subscribing to AT&T's FirstNet services in
Puerto Rico and the U.S. Virgin Islands will still have access to the
benefits and capabilities of the FirstNet network platform, including
priority and preemption.
"I'm proud of AT&T's history in Puerto Rico and the U.S. Virgin
Islands," said Jose J. Davila, AT&T Vice President-General Manager for
the region. "I'm especially proud of our network and the recent network
enhancements that have helped AT&T rank as the fastest network in Puerto
Rico.1 AT&T also has the most coverage on the island, according to
Mosaik. Our experienced and committed team members will continue to
support these operations as we join Liberty Latin America. Liberty Latin
America has expressed its commitment to provide high-quality
communications services to the people of Puerto Rico and the U.S. Virgin
Islands. And we're confident that it is equally committed to supporting
"The combination of AT&T's leading mobile and wired businesses with
Liberty Puerto Rico's leading high-speed broadband and TV business will
create a strong and competitive integrated communications player," said
Balan Nair, president and CEO, Liberty Latin America. "At Liberty Latin
America, we are focused on investing in digital infrastructure,
innovation and 5G networks and on delivering a friendly customer service
experience. This transaction is evidence of that, and we are confident
that this new combination will be good for our customers and our
employees, including those joining us from AT&T."
Under the terms of the agreement, AT&T will receive $1.95 billion in
cash at close, subject to customary closing adjustments. The transaction
is subject to review by the FCC and the Department of Justice. The two
companies expect the deal to close within 6 to 9 months.
reach its de-leveraging goal, AT&T plans to use free cash flow after
dividends and to continue monetization initiatives. AT&T has already
surpassed its monetization goal of a net $6 billion to $8 billion in
2019, with a cumulative total of $10 billion raised year to date — from
both asset monetizations and working capital initiatives. With this
deal, the total of completed or announced monetization efforts this year
is more than $11 billion.
Given the company's confidence in reaching a net debt-to-adjusted EBITDA
ratio in the 2.5x range this year, shareholders should expect that share
buybacks will be in the mix in the fourth quarter of 2019, along with
"This transaction is a result of our ongoing strategic review of our
balance sheet and assets to identify opportunities for monetization,"
said John Stephens, AT&T chief financial officer. "But doing so only
made sense if we received a fair value from a buyer that is committed to
taking this well-run business, with its skilled employees and loyal
customer base, and help it thrive. Liberty Latin America has a strong
reputation for quality of service, and we believe they have the
experience to build on the success of these operations."