DENVER-U S West Inc.’s Media Group and AirTouch Communications Inc. have signed a definitive agreement to merge Media Group’s domestic cellular business and its interest in PrimeCo Personal Communications into AirTouch.
The principal terms of the agreement are the same as those in the April 17 letter of intent signed by the companies.
The proposed transaction, which the parties value at approximately $5 billion, includes the tax-free distribution of AirTouch stock to Media Group shareholders and the assumption by AirTouch of $2.2 billion of debt associated with the business being acquired.
Closing the transaction will require favorable rulings from the Internal Revenue Service, Hart-Scott-Rodino review and approval by shareholders of the two companies.
While the companies hope to close the deal by the end of the year, the transaction would be blocked if “Morris Trust” legislation, pending in Congress, is passed in its current form. Morris Trust Fund transactions involve the distribution of stock of a subsidiary by a parent company on a tax-free basis. In the event the congressional legislation passes, U S West and AirTouch plan to continue with their existing joint venture agreement.