Japanese telecom giant SoftBank has acquired a 70 percent controlling stake in Sprint, America's third-largest wireless carrier, for $20.1 billion, Sprint confirmed on Monday on the heels of reports of an impending deal last week. The new company is being referred to as "New Sprint," for now.
Sprint explained in a news release Monday that the $20.1 billion would be divided as follows: $12.1 billion will be used for a buyback from shareholders (55 percent of currently outstanding shares), while the remaining $8 billion will be used to "enhance [New Sprint's] mobile network" and "strengthen its balance sheet."
Sprint also made a point of stating that the SoftBank deal would help Sprint roll out its 4G LTE high-speed wireless network in the U.S., expanding beyond its current footprint in "Atlanta, Baltimore, Dallas-Fort Worth, Houston, Kansas City, San Antonio and Waco."
The acquisition comes after Sprint acted the leading commercial objector to AT&T's proposed acquisiiton of fourth-largest U.S. wireless carrier T-Mobile, a deal that fell apart in late 2011 after the Justice Department sued to block it on antitrust grounds. Sprint's majority acquisition by Softbank will also have to clear regulatory hurdles in the U.S. and internationally to proceed.