AT&T Reaches Deal To Sell, Lease Towers To Crown Castle International For $4.85 Billion

AT&T (NYSE: T) announced on Sunday that it will sell and lease nearly 10,000 of its wireless towers to Houston-based Crown Castle International Corp. (NYSE:CCI) in an all-cash deal worth $4.85 billion.

According to the agreement, Crown Castle will buy nearly 600 AT&T towers, and exclusively lease and operate about 9,100 more, a company statement said. The deal, expected to be finalized by the end of 2013, will help AT&T enhance its U.S. wireless and Internet operations, and fund acquisitions abroad.

“This deal will let us monetize our towers while giving us the ability to add capacity as we need it,” Bill Hogg, senior vice president of Network Planning and Engineering at AT&T, said in the statement.

Dallas-based AT&T will sublease capacity on the towers from Crown Castle for a minimum of 10 years for $1,900 a month for each site, with annual rent increases of 2 percent, and the option to renew up to a total of 50 years, according to the statement.

Crown Castle, which operates about 40,000 towers in the U.S., said in a statement, that the latest deal will contribute approximately $245 million to $255 million to its Adjusted Funds from Operations, or AFFO, before financing costs in 2014.

According to AT&T’s statement, the company does not expect a “significant impact” to its financial results from the transaction.

The deal would consolidate Crown Castle’s status “as the largest provider of shared wireless infrastructure in the US, which we believe is the largest, fastest growing and most profitable wireless market in the world," Ben Moreland, Crown Castle's President and CEO, said in a company statement. The company will hold a conference call on Oct. 21 at 7:30 a.m. EDT to discuss the transaction, as well as its third quarter 2013 results.

On Friday, AT&T stock ended up 0.49 percent at $34.61 while Crown Castle’s shares were down 1.11 percent at $75.96.