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American Tower to buy owner of about 5,400 cellular towers

September 06, 2013|Bloomberg News

American Tower is buying the parent company of Global Tower Partners, which owns about 5,400 cellular towers in the U.S., for about $3.3 billion.

American Tower is acquiring MIP Tower Holdings, a closely held real estate investment trust that owns Global Tower Partners and related companies, the companies said Friday. The deal also brings to American Tower the management rights to more than 9,000 additional sites. Including debt, the purchase price is about $4.8 billion.

The tower industry is consolidating, with fewer companies controlling bigger swaths of equipment amid booming demand for mobile communications and the gear needed to transmit signals, said James Moorman, an analyst at S&P Capital IQ Inc.

This is the second major acquisition by American Tower in the last two months. The Boston company agreed last month to buy almost 4,500 wireless sites from NII Holdings Inc. in Brazil and Mexico for $811 million.

Including debt, Friday's acquisition would be one of the 10 biggest telecommunications takeovers of the year, according to data compiled by Bloomberg. It follows two other blockbuster deals this week: Verizon Communications Inc. agreed to purchase Vodafone Group's stake in Verizon Wireless for $130 billion and Microsoft Corp. announced plans to buy Nokia's mobile-phone business for $7.2 billion.

The additional towers will help American Tower keep up with the shift to fourth-generation networks. Carriers also need greater coverage density as they plan to sell more mobile data services, Moorman said. The four largest U.S. carriers — all of which are American Tower customers — are upgrading their systems to a standard called long-term evolution, or LTE, giving users faster access to video and the Web.

American Tower and chief rival Crown Castle International Corp. are playing an increasingly vital role in the wireless industry, with many carriers selling their antennas to the companies and leasing them back. American Tower, which already had about 56,000 properties in its portfolio before Friday's transaction, also makes deals with landowners to put cell sites on their land. The infrastructure lets mobile-phone customers place calls and connect to the Internet.

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