VoiceStream to Buy Aerial Communications
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BELLEVUE, Wash. — Wireless phone company VoiceStream Wireless Corp. said Monday that it will buy digital cellular phone company Aerial Communications Inc. for about $1.8 billion.
VoiceStream, which previously agreed to buy wireless telecommunications firm Omnipoint Corp., said it will exchange 0.455 share of its common stock for each share of Aerial common and Series A common. Aerial shareholders would have the option to receive $18 cash per share in lieu of VoiceStream stock.
News of the deal sent Aerial shares up $6.63, or nearly 35%, to close at $26.63. VoiceStream jumped $5.88, or 10%, to close at $61.94. Both trade on Nasdaq.
Aerial serves six wireless markets, including four of the largest metropolitan markets in the U.S.-- Houston, Tampa, Minneapolis and Pittsburgh.
Telephone & Data System Inc., the majority shareholder in Aerial, had planned to spin off Chicago-based Aerial but said it now has canceled that idea. It would own 35.6 million shares, or a 14% stake, of VoiceStream.
Finnish telecommunications company Sonera Ltd., another major shareholder in Aerial, said it will invest $230 million in Aerial and $500 million in VoiceStream at the Omnipoint closing. After the Omnipoint and Aerial deals, Sonera would have a 7.9% stake in VoiceStream.
“Aerial’s wireless real estate fills in badly needed holes for a GSM [global system for mobile communication] consolidation play,” said Tim O’Neil, an analyst with Soundview Technologies Group. “What VoiceStream is buying is not necessarily an easily integrated property but wireless real estate,” he added.
The only region that’s keeping Bellevue-based VoiceStream away from a more complete national footprint is the Southeast, O’Neil said, an area dominated by Powertel Inc., in which Sonera owns about a 9% stake.
Once the Omnipoint and Aerial deals are completed, VoiceStream will have annual service revenue of more than $825 million and serve nearly 1.5 million customers. The new, combined company would own wireless licenses to serve nearly 200 million people.
