Mergers & Acquisitions
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I am a rookie and have some questions in understanding the att and t-mobile deal.
1. purchase price of 39b is comprised of 25b in cash and 14b in att stocks. What would be the balance sheet effect to att?
( my thoughts: att 's cash is going to be reduced by 25b less the increase t-mobile's cash, goodwill is going to increase by the amount of purchase price less fair value of t-mobile, other assets or liability will increase or decrease by the fair value of t-mobiles assets and liability, however, it is hard to determine the change in equity. How should I approach? )
2. How do I understand the 14b stock purchase? Is it going to be new stock issuance?
( the available info suggest that Deutsche Telekom will have up to 8% of att shares, that is how much 14b is to att's market cap. Does that suggest that there is no new stock issuance involved? )
3. How do I know if att is not over paying t-mobile?
Sorry if I sound confusing. Please help out. Read More