**Editor’s Note: Please click here for a recap of the biggest channel-impacting mergers in April.**
Verizon has won a bidding war with AT&T for the rights to buy Straight Path Communications and the large amount of wireless spectrum that it owns.
AT&T had a deal in place to buy Virginia-based Straight Path for $1.6 billion just last month, but Verizon stepped in and offered more, leading to a bidding war that ended late Wednesday with an announcement that Straight Path had agreed to Verizon’s $3.1 billion bid — nearly double AT&T’s original offer. That’s $184 per share for the company, the Wall Street Journal first reported — and Verizon may have bought it for a bargain. Straight Path was only valued at $400 million two months ago, with its shares trading for just $35. They jumped more than 40 percent this week (to $230) alone before settling back to about $180 as the market was preparing to close on Thursday.
So why is this important? Much of the spectrum that Straight Path owns meets the needs of super-fast 5G networks — something that Barron’s notes could give Verizon an edge in the mobile arms race going forward. That could make the company a more attractive mobility vendor to channel partners as well.
5G technology is expected to be a huge step up from 4G, with 30-40 times faster speeds, opening the door for the Internet of Things to really take off.
AT&T has been busy diversifying its business in the last couple of years with its purchase of DirecTV and its pending acquisition of Time Warner. Verizon has been linked to rumors surrounding possible acquisitions of cable giants Comcast and Charter, but it appears to be sticking with its bread and butter for now by doubling down on wireless.
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December 14 2018 @ 18:50:05 UTC