AT&T has agreed to sell its wireless and wireline operations in Puerto Rico and the U.S. Virgin Island to Liberty Latin America Ltd. in an all-cash transaction.
The assets are valued at $1.95 billion, the companies said.
AT&T is under pressure from investor Elliott Management to divest assets and reduce debt.
“This strategic and complementary acquisition is an exciting and unique opportunity to expand our business in one of our best markets,” said Balan Nair, CEO of Liberty Latin America.
Nair said the acquisition was being done at an attractive valuation and would enable the company to expand its product portfolio.
“By continuing to invest in digital infrastructure, innovation, 5G networks and a friendly customer service experience, we are confident that this new combination will support our long-term growth profile and that this deal will be free cash flow accretive on a per share basis,” he said.
The assets being acquired provide consumer mobile and B2B services in Puerto Rico and the U.S. Virgin Islands, excluding DirecTV customers.
Under the terms of the agreement, AT&T will support LLA for a period up to 36 months following the acquisition enabling an efficient transition of services. Following the acquisition, customers current AT&T customer will continue to get free roaming services between Puerto Rico, the U.S. Virgin Islands and the mainland United States, Mexico and Canada.
“I’m proud of what our team has built in this region,” said Jose Davila, VP and general manager for AT&T in Puerto Rico and the U.S. Virgin Islands. “We look forward to joining Liberty Latin America to continue to deliver a superior experience for our valued customers here. And our committed and talented team will bring a wealth of experience to Liberty Latin America and continue to build on our success in Puerto Rico and the U.S. Virgin Islands.