AT&T announced today that they would be acquiring Straight Path Communications for a total of $1.6 billion. This is an all-stock deal, and the reasoning behind AT&T purchasing this company is for the spectrum. This acquisition will help bolster their already pretty large portfolio of millimeter wave spectrum. Straight Path's CEO, Davidi Jonas stated that "the merger of AT&T and Straight Path Communications marks a vital point for us. This merger provides Straight Path shareholders with a compelling return since Straight Path's spin-off to become an independent public company in 2013, with an initial price per share of $6.40 on July 31st, 2013". In this deal, shareholders will receive about $95.63 per share, which is being paid in AT&T stock.
Straight Path Communications has a pretty large amount of 39GHz and 28GHz spectrum across the US, including at least 620MHz of 39GHz spectrum in the top 30 US markets, making this a pretty big deal for AT&T, especially with 5G not too far away. AT&T is looking to bolster their portfolio for 5G with high-band spectrum because that spectrum is going to be very vital for the rollout of 5G. Seeing as high-band spectrum holds a lot more bandwidth than something like 700MHz spectrum, which AT&T relied on heavily for their 4G LTE network and it'll still be pretty important with 5G.
Now, this deal is not final just yet. It does still need to be reviewed by the FCC, and the two companies are expecting the deal to be finalized within the next 12 months. There is a chance that the FCC may block this deal between these two companies, considering this would give AT&T a large amount of spectrum that is needed for 5G, it could get a bit interesting. But they aren't taking all of the millimeter wave spectrum that is available, so it should still go through without much of an issue. Especially with Trump's FCC wanting to do less regulation, this deal could go through pretty quickly. AT&T and Straight Path Communications' deal should be an easy one for the new FCC to approve, but it'll be one of a couple of deals that AT&T has going through the FCC. The other being for Time Warner.