AT&T to buy Nextel Mexico from Reston-based NII Holdings

AT&T has agreed to buy the Mexican wireless business of Reston-based NII Holdings Inc. for $1.88 billion, less outstanding net debt.

Under terms of the agreement, Dallas-based AT&T will acquire all companies that operate under the name Nextel Mexico, including wireless properties such as spectrum licenses, network assets and retail stores. Nextel Mexico has about 3 million subscribers.

NII, a Fortune 500 company, provides mobile communications services in Latin America under the Nextel brand. The company filed for Chapter 11 bankruptcy protection in September.

AT&T will combine Nextel Mexico with Iusacell, a Mexican wireless company AT&T bought Iusacel in November for $1.7 billion.

AT&T said it intends to create a North American mobile service area covering over 400 million consumers and businesses in Mexico and the United States.

The transaction is subject to a bankruptcy auction and approvals by the U.S. Bankruptcy Court for the Southern District of New York, which is overseeing the restructuring of NII.  The transaction is also subject to regulatory approval by Mexico’s telecom regulator IFT (Instituto Federal de Telecomunicaciones).

Based on its experience with Iusacell, AT&T expects the Nextel Mexico deal to close in mid- 2015.

NII and 12 of its subsidiaries announced in November that they had reached an agreement with major stakeholders on terms on a Chapter 11 reorganization plan.