Verizon beat rival AT&T in a battle to acquire US spectrum licence holder Straight Path Communications, as the companies entered into a definitive agreement to merge for $3.1 billion.

Straight Path Communications said in a statement it would now terminate a $1.6 billion agreement with AT&T, struck in early April, and Verizon would pay its rival a termination fee of $38 million, as previously announced.

The agreement with Verizon follows an intense bidding war for Straight Path Communications, which holds licences for spectrum expected to be used for the country’s future 5G roll-out.

AT&T appeared to have wrapped up the deal last month, until an unnamed multi-national telecoms company submitted a higher offer of $1.8 billion.

The bid was then increased to $2.3 billion last week, and finally $3.1 billion earlier this week, which sealed the deal.

Although Verizon was widely reported to be the mystery bidder, the identity of AT&T’s rival was not confirmed until now.

Despite the increased offers, AT&T’s agreement remained valid until any new offer was formally accepted, and Straight Path Communications revealed in a statement the operator had decided not to raise its original offer.

“AT&T informed Straight Path that after much deliberation, it has determined not to make any new bids or proposals to Straight Path or to propose any amendments to the AT&T merger agreement.”

Straight Path Communications holds 735 mmWave licences in the 39GHZ band and 133 licences in the 28GHz band, which will cover the whole of the US.

Both spectrum bands have been approved by regulator Federal Communications Commission (FCC) for 5G use. Bloomberg reported Straight Path is the third largest owner of spectrum licences approved by the FCC for 5G use.