T-Mobile expects $1 billion pretax to offload wireline business to Cogent.

The T-Mobile logo is printed on a building sign in Los Angeles, California, US, May 11, 2017. REUTERS/Mike Blake

Sept 7 (Reuters) – T-Mobile US Inc ( TMUS.O ) said on Wednesday it had agreed to sell its wireline business to Cogent Communications Holdings Inc ( CCOI.O ), which will provide T-Mobile with some services. In payment to Cogent.

The purchase price was not disclosed. T-Mobile said it will record about $1 billion before taxes in the third quarter of 2022, to cover the cost of carrying the wireline business and contract payment liability for the transaction.

T-Mobile and Cogent did not immediately respond to a Reuters request for comment on the deal’s value.

Cogent said it will acquire T-Mobile’s fiber and related assets and certain liabilities related to the business, which will help it strengthen its offerings to consumers and enterprises.

Following the closing of the transaction, the parties will enter into a separate agreement under which Cogent will acquire certain services for T-Mobile for $700 million in cash.

The deal will go through the newly formed Cogent Direct subsidiary, which said it does not intend to issue new debt or equity to make the acquisition.

Cogent added that the deal is not expected to go down with existing shareholders and that the company will continue its current dividend plan.

Reporting by Yuvraj Malik in Bengaluru; Editing by Anil D’Silva and Milla Nissi

Our Standards: The Thomson Reuters Trust Principles.