Sprint’s sprawling campus in Overland Park, Kansas
U.S. wireless carrier Sprint and Japanese mobile operator Softbank are getting married. In a joint press conference, the two companies officially announced that Softbank will buy a 70 percent stake in U.S. mobile carrier Sprint for $20.1 billion — of which $12.1 billion will be distributed to Sprint stockholders and $8 billion will be used as new capital.
About 55 percent 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 U.S. subsidiary, to be called New Sprint. New Sprint will use those funds towards to speed up its rollout of its promised nationwide ‘4G’ LTE network.
The merger has been approved by the Boards of Directors of both SoftBank and Sprint, but is still subject to Sprint stockholder approval, as well as the usual regulatory approvals. The companies expect to close the merger in mid-2013 — at which time SoftBank plans to invest an additional $17 billion in New Sprint. Of that cash, $4.9 billion will be used to buy newly issued common shares of New Sprint at $5.25 per share, and the remaining $12.1 billion will be distributed to Sprint stockholders in exchange for about 55% of currently outstanding shares. The other 45% of currently outstanding shares will convert into shares of New Sprint.
Sprint’s minority stake in Clearwire was previously a sticking point in the proposed merger, but just today Sprint announced it will pay $100 million to buy more shares of the company, finally giving Sprint more than 50 percent stake in Clearwire and majority voting power.
What do you think of the proposed Sprint-Softbank marriage? Do you think it’s a good thing for Sprint customers, or will it drive customers away? Let us know in the comments below.
