Crown Castle to buy rights to AT&T towers for $4.85 bln


Oct 20 (Reuters) - Wireless infrastructure provider CrownCastle International Corp said on Sunday that it hadagreed to buy rights to about 9,700 AT&T Inc wirelesscommunication towers for $4.85 billion in cash.

Under the agreement, Crown Castle will purchase some 600towers and have the exclusive right to lease and operate around9,100 AT&T towers for a weighted average term of about 28 years.

The company will have the option to purchase the towers atthe end of the lease terms for option payments of around $4.2billion.

Crown Castle expects to fund the transaction with cash onhand, equity and debt financing, including borrowings under itsrevolving credit facility.

"Consistent with our focus on the top 100 US markets, nearlyhalf of the AT&T towers are located in the top 50 markets, wherewe expect the majority of network densification and upgradeactivity to occur.

The deal is expected to close by the end of the year.

AT&T, the No. 2 wireless carrier in the United States, hadsaid last month that it was exploring the sale of its towers butthat its ability to reach a deal would depend on the terms it isable to reach with the buyer for its ongoing use of the towers.

When wireless service providers sell broadcast towers theytypically lease back space from tower operators so they cancontinue to offer their services without interruption

"This deal will let us monetize our towers while giving usthe ability to add capacity as we need it," said Bill Hogg,Senior Vice President - Network Planning and Engineering, AT&TServices Inc.

"And we'll get additional financial flexibility to continueto invest in our business, maintain a strong balance sheet andreturn value to our shareholders," he added.

Under the deal AT&T will keep its communications facilitieson the towers for a minimum of 10 years with monthly rent of$1,900 per site and fixed annual rent escalators of 2 percent.

AT&T will also have access to additional space on the towersfor its future use, the company said.

Crown Castle will have the right to sublease other availablecapacity on the towers and expects to accommodate at least oneadditional tenant per tower.

In addition, it said nearly half of the towers were locatedin the top 50 markets, where it aims to benefit fromincreasingly dense networks and future network upgrades.

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