T-Mobile US, Inc. said that it had agreed to sell its wireline business to Cogent Communications Holdings, Inc. in a deal that would also see Cogent provide some services to the carrier for a fee. T-Mobile stated that it expects to record a pre-tax charge of about $1 billion in the third quarter of 2022 to cover the carrying value of the wireline business as well as a liability for the transaction’s contractual payments.
Cogent will acquire T-fiber Mobile’s and related assets and certain liabilities associated with the business, helping it bolster its offering to consumers and enterprises, it said in a statement. Once the transaction is closed, the parties will enter into a separate agreement pursuant to which Cogent will offer certain services to T-Mobile for $700 million, to be paid in tranches.
The deal will go through a newly formed direct subsidiary of Cogent, which said it did not plan to issue new debt or equity to finance the acquisition. Cogent also stated that the transaction would not dilute existing stockholders and that the company would maintain its current dividend plan.
