Wireless carrier Sprint will soon see a change of leadership, as the company’s board of directors has approved a proposed acquisition by SoftBank.
Rumors on a possible take-over emerged online last week
, when the deal was said to involve around $20 billion being paid to Sprint.
The wireless carrier was quick to confirm the rumor, suggesting at the time that, while discussions were underway, nothing was settled.
Today, however, both Sprint and SoftBank, a Japanese wireless carrier, officially confirmed that they have reached an agreement, and that the deal will involve the purchase of 17 percent stake in Sprint.
As part of the agreement between the two, SoftBank will invest $20.1 billion in Sprint, $12.1 billion of which will be delivered to stockholders. $8.0 billion of the capital is meant to “strengthen Sprint’s balance sheet.”
“Through this transaction, approximately 55% of current Sprint shares will be exchanged for $7.30 per share in cash, and the remaining shares will convert into shares of a new publicly traded entity, New Sprint,” the duo announced.
“Following closing, SoftBank will own approximately 70% and Sprint equity holders will own approximately 30% of the shares of New Sprint on a fully-diluted basis.”
New Sprint is expected to prove more competitive in the US market following the acquisition, as SoftBank will bring along its deep expertise in network roll-out, as well as an important cash contribution.
The transaction has been already approved by the boards of directors of both companies, and is pending Sprint
stockholder approval, customary regulatory approvals and the like. The deal is expected to be closed by mid-2013, Sprint announced.
“This is a transformative transaction for Sprint that creates immediate value for our stockholders, while providing an opportunity to participate in the future growth of a stronger, better capitalized Sprint going forward,” Sprint CEO, Dan Hesse, said.
“Our management team is excited to work with SoftBank to learn from their successful deployment of LTE in Japan as we build out our advanced LTE network, improve the customer experience and continue the turnaround of our operations.”