Verizon has announced it will acquire Straight Path Communications for $3.1 billion. The purchase price far exceeds the offer AT&T had made when it first expressed interest in acquiring the spectrum holder the previous month.
Straight Path became the center of a competitive bidding process after AT&T revealed its intention to acquire the company on April 11. Straight Path provided periodic updates as new offers arrived: on April 25 it reported an unidentified “multi-national telecommunications company” had submitted a $1.8 billion bid, followed by subsequent bids of $2.3 billion on May 3 and $3.1 billion on May 8.
Late yesterday Verizon confirmed that its $3.1 billion bid was the winning, final offer. Straight Path also announced it had terminated the agreement with AT&T. As part of the process, Verizon, acting on behalf of Straight Path, will pay AT&T a $38 million termination fee.
“Verizon now has all of the pieces in place to quickly accelerate the deployment of 5G,” said Hans Vestberg, executive vice president and president of global network and technology at Verizon. “Combined with our recent transactions with Corning Incorporated, XO Communications, and Prysmian Group, this is another step to build the next-generation network for our customers.”
Straight Path’s spectrum holdings are the reason it attracted such intense interest. Although the full commercial value of 5G spectrum is still emerging, the company owns 868 FCC licenses that provide wireless coverage across the United States, including millimeter-wave bands well-suited for future 5G services. Straight Path itself highlights its ability to support next-generation network solutions through its spectrum assets.
Other carriers are also advancing 5G plans. Sprint announced a collaboration with Qualcomm and SoftBank to explore 25 GHz 5G technologies, while T-Mobile laid out its vision for a nationwide 5G rollout earlier in the month, accompanied by strong public statements from its CEO.
Debevoise & Plimpton LLP served as legal counsel to Verizon in connection with the Straight Path transaction.