T-Mobile US Inc announced on Wednesday its intention to offload its wireline business to Cogent Communications Holdings Inc. While the exact purchase price has not been disclosed, a $1 billion pre-tax charge in the third quarter of 2022 is expected to be imposed as a means of covering the carrying value of the wireline business.
In addition to obtaining this business unit, Cogent would also be entitled to receive some additional services from T-Mobile for a fee. The transaction will see Cogent acquire T-Mobile’s fiber business as well as certain liabilities. The deal is expected to go through a direct subsidiary of Cogent.
Once the pre-tax charge, as well as the acquisition fee, are taken care of, a separate agreement between the parties is expected to come into effect, whereby T-Mobile will pay $700 million to Cogent for the provision of certain services, expected to be paid in installments.
According to Cogent, the addition of the wireline business will not affect any change in the company’s existing dividend plan and no dilution to existing stockholders’ shares is expected to occur.