AT&T (T) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition expands fiber reach to over 30 states and 60 million locations by 2030, doubling current footprint.

• Enables accelerated fiber access outside traditional regions, targeting major metros like Seattle, Denver, Las Vegas, Orlando, and Phoenix.

• Supports strategy to be the leading U.S. connectivity provider through 5G and fiber.

• Transaction separates fiber assets from legacy copper, leveraging operational expertise in fiber networks.

• Provides Lumen with access to AT&T wireless technologies for legacy copper customers.

Transaction overview and financial terms

• AT&T will acquire Lumen's Mass Markets fiber business for $5.75 billion in cash, adding about 1 million fiber customers and over 4 million fiber locations across 11 states.

• The deal is expected to close in the first half of 2026, pending regulatory approval and customary conditions.

• AT&T will hold the acquired assets in a new subsidiary, NetworkCo, and plans to bring in an equity partner within 6-12 months post-close.

• Impact on Adjusted EBITDA, EPS, and Free Cash Flow expected to be immaterial for 12–24 months post-close, accretive long term.

• AT&T remains committed to its net leverage target and plans to repurchase at least $3 billion in stock by year-end, with the remainder of the $10 billion authorization in 2026.

Synergies and expected cost savings

• Access to Lumen's scaled fiber build engine and AT&T's supply chain expected to accelerate out-of-region expansion.

• Anticipated increase in fiber penetration to 40% in acquired footprint, matching current AT&T Fiber levels.

• Converged customers (fiber and wireless) expected to drive higher retention and returns.

• The deal enables AT&T to offer converged fiber and 5G services, aiming to grow high-value customer relationships and mobility business.

• Subscribers will transition to AT&T Fiber, benefiting from simple pricing, multi-gig speeds, and enhanced service.