(OVERLAND PARK, Kan.) -- Sprint Nextel Corp. announced on Monday it has reached a $20.1 billion deal with Softbank that will give the Japanese wireless provider a 70 percent stake in the company.
The deal consists of $12.1 billion being distributed to Sprint stockholders and $8 billion of new capital "to strengthen Sprint’s balance sheet," Sprint said in a statement.
"SoftBank’s cash contribution, deep expertise in the deployment of next-generation wireless networks and track record of success in taking share in mature markets from larger telecommunications competitors are expected to create a stronger, more competitive New Sprint that will deliver significant benefits to U.S. consumers," Sprint said.
The deal will give Sprint, the number three U.S. wireless provider, a much needed financial boost and put it in a position to compete with larger rivals Verizon and AT&T. It will also allow the company to pay down billions of dollars in debt and expand its next generation wireless network.
"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. 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,” Sprint CEO Dan Hesse said.
The deal has been approved by the Boards of Directors from both companies but is still "subject to Sprint stockholder approval, customary regulatory approvals and the satisfaction or waiver of other closing conditions" before it is completed, Sprint said. Both companies expect the transaction to be closed sometime in mid-2013.
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