Japanese carrier Softbank announced today at a press conference in Tokyo that it will acquire a majority stake in Sprint for $20.1 billion.
Softbank will purchase $8 billion of new stock and $12 billion of existing stock from Sprint to control 70 percent of New Sprint, a newly-constructed company that will control the existing Sprint company. The combined Softbank and Sprint will have one of the largest subscribers bases in the world, and will rank third in mobile service revenue.
Pending FCC and antitrust approval the deal will close in the middle of 2013.
The acquisition will give Sprint more capital for rolling out 4G LTE. The new company can also leverage Softbank’s knowledge of how it rolled out its 4G LTE network in Japan. In Japan, Softbank uses TD-LTE, which is the same form of 4G LTE that Sprint’s partner Clearwire will roll out in the U.S. next year.
Sprint’s current plan for 4G LTE involves more than 120 cities including large cities like New York City, Los Angeles, Chicago, and San Francisco. Sprint doesn’t have any firm dates for when it will roll out 4G LTE in these areas, saying only it will arrive in “coming months.”
According to The Verge during the press conference SoftBank CEO Masayoshi Son said he wants his company to be number one. When asked about future acquisitions he said “there’s a possibility we’ll acquire DoCoMo,” the number one carrier in Japan. Sprint CEO Dan Hesse added that consolidation outside of AT&T and Verizon “is very good for the industry.”