Japan’s SoftBank acquires 70% stake in Sprint

Sprint WirelessJapan’s SoftBank announced over the weekend that it plans to acquire a 70% stake in Sprint, the third largest wireless carrier in the U.S. The deal is worth US$20.1 billion, including US$8.0 billion of new capital for the carrier. Together, the two carriers will have 96 million subscribers.

SoftBank Chairman and CEO, Masayoshi Son, said, “This transaction provides an excellent opportunity for SoftBank to leverage its expertise in smartphones and next-generation high speed networks, including LTE, to drive the mobile internet revolution in one of the world’s largest markets. As we have proven in Japan, we have achieved a v-shaped earnings recovery in the acquired mobile business and grown dramatically by introducing differentiated products to an incumbent-led market. Our track record of innovation, combined with Sprint’s strong brand and local leadership, provides a constructive beginning toward creating a more competitive American wireless market.”

The deal should give Sprint a leg up against larger competitors AT&T and Verizon Wireless. Not only should it be able to accelerate its 4G LTE network deployment but it also will also be able to look at future acquisitions.

The deal has already been approved by both companies’ boards. Pending the necessary approvals and closing conditions, the merger should close sometime in mid-2013.

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