Topic: Growth Stocks

Wall Street Stock Forecaster Hotline – Friday, March 25, 2011

Article Excerpt

AT&T INC., $28.85, New York symbol T, has agreed to buy T-Mobile from Germany’s Deutsche Telekom AG. T-Mobile is the fourth-largest provider of wireless services in the U.S., with 33.7 million subscribers. Adding T-Mobile would make AT&T the largest wireless carrier in the U.S., with 130 million subscribers. This is huge purchase for AT&T, which will pay $39 billion for T-Mobile. That’s equal to 23% of its $170.5-billion market cap. AT&T will pay $25 billion in cash, and the remaining $14 billion in stock. That would give Deutsche Telekom an 8% stake in AT&T. It will probably take several months for regulators to approve the deal. If AT&T can’t complete the purchase, it will pay Deutsche Telekom $3 billion, and give it the rights to some of its wireless spectrum. Big purchases like this involve substantial risk. However, the deal will help AT&T take advantage of rising demand for wireless data services as more people use smartphones and tablet computers to access the…