Earlier on in the week we had learned that Verizon was looking to potentially sell off some of its assets in the form of wireline assets as well as a portion of its cell phone towers that could collectively total an amount of up to $15 billion. Verizon has already sold the wireline assets across three states to Frontier Communications for the sum of $10 billion, and now they have reportedly just reached an agreement to sell off the cell phone towers which totals 11,324 of its towers across all 50 states to American Tower for a sum of $5.056 billion, which brings them to a little over the expected $15 billion for the collective.
Verizon Wireless was reported to have spent around $10.4 billion on spectrum during the recently closed AWS-3 spectrum auction that ended the last round of bidding last week, and they also completed an acquisition with Vodafone back in 2014 to buy the 45% share in their own company that they didn't already own which cost them about $130 billion, so the sale of some un-needed assets is a way for them to recuperate some of the costs they have accrued. The deal with American Tower is expected to be finalized before the summer(sometime in the first half of the year)and will see American Tower have exclusive rights to lease and operate them for a 28 year period, which they may also buy when the 28 years is up.
This deal really comes as no surprise as Verizon Chief Executive Lowell McAdam was cited stating that "There are certain assets on the wireline side that we think would be better off in somebody else's hands so we can focus our energy in a little bit more narrow geography." Those hands include American Tower, which plans to receive incremental leasing revenue from other tenants who may want to lease the towers during the term length of the deal which they hope will help them enable the growth of faster broadband across the country. The deal between the two companies also sees the complete sale of 165 additional cell towers separate from the 11 thousand plus towers they're leasing over the term.