UPDATE 1-Crown Castle to buy rights to AT&T towers for $4.85 bln
Oct 20 (Reuters) - Crown Castle International Corp said on Sunday that it had agreed to buy rights to about 9,700 AT&T Inc wireless communication towers for $4.85 billion in cash.
Under the agreement, Crown Castle will have the exclusive right to lease and operate the AT&T towers for a weighted average term of about 28 years.
The company will have the option to purchase the towers at the end of the lease terms for option payments of around $4.2 billion.
Crown expects to fund the transaction with cash on hand, equity and debt financing, including borrowings under its revolving credit facility.
The deal is expected to close by the end of the year.
AT&T, the No. 2 wireless carrier in the United States, had said last month that it was exploring the sale of its towers but that its ability to reach a deal would depend on the terms it is able to reach with the buyer for its ongoing use of the towers.
When wireless service providers sell broadcast towers they typically lease back space from tower operators so they can continue to offer their services without interruption.
Under the deal AT&T will keep its communications facilities on the towers for a minimum of 10 years with monthly rent of $1,900 per site and fixed annual rent escalators of 2 percent.
AT&T will also have access to additional space on the towers for its future use, the company said.