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SoftBank to Pay $20 Billion For 70% of U.S. Carrier Sprint

By - Source: SoftBank (PDF) | B 14 comments

Deal comes at a perfect time for Sprint, who posted a net loss of $1.37 billion during 2012's second quarter.

Japanese company SoftBank has announced its plan to purchase a 70 percent stake in U.S. carrier Sprint for $20.1 billion, which will include $8 billion towards investment.

The all-cash deal is expected to close during mid-2013, with the Japanese technology and investment firm due to purchase an accumulative of 70 percent of Sprint's stock for $12.1 billion, accompanied by a further $8 billion in investment.

SoftBank has offered to buy Sprint shareholders' stock at $7.30, representing a 27 percent premium over the carrier's closing stock price on Friday. Boards from both companies have approved the transaction.

"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 the world's largest market," said Softbank CEO Masayoshi Son. "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 and innovative services 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 mobile market."

The deal comes at an ideal time for Sprint, who reported a net loss of $1.37 billion during the second quarter. Sprint CEO Dan Hesse said the deal will benefit shareholders, as well as lead to a "stronger, better-capitalized Sprint." Sprint will also learn from SoftBank's "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."

SoftBank, who will pay the $12.1 billion in cash, said the money will derive from the company's own reserves and financing stemming from Mizuho Corporate Bank, Sumitomo Mitsui Banking, the Bank of Tokyo-Mitsubishi UFJ, as well as Deutsche Bank.

 

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  • 0 Hide
    thecolorblue , October 15, 2012 8:47 PM
    30% is still available!
  • -3 Hide
    RADIO_ACTIVE , October 15, 2012 9:06 PM
    I guess the unlimited data marketing didn't work out for Sprint
  • 0 Hide
    sykozis , October 15, 2012 9:37 PM
    RADIO_ACTIVEI guess the unlimited data marketing didn't work out for Sprint

    While the data isn't limited....the coverage area very much is.... They currently have no 4G network....yet they actively market their "4G" smartphones, placing emphasis on the "4G" capability of said phones. Sprint's 3G network has less coverage than AT&T's 4G network, which is pathetic at this point. Their phone selection sucks compared to their competitors (including pre-paid cellular services)... They try to charge customers to replace phones that are covered by a manufacturer's warranty... There's really very little Sprint actually does right....
  • -1 Hide
    jacobdrj , October 15, 2012 9:41 PM
    They DO have unlimited data. Where 4G is available, it is fine. I just wish their phone selection was better: Their dumb-phone selection is worse than it was a year ago. Their smart-phones REQUIRE a dataplan. So my wife is stuck with an old dumphone for now.

    Eventually, I'll get her onto MetroPCS (a T-Mobile subsidiary) though, or Virgin (a Sprint subsidiary). Their service is good in our area, and their prices are virtually unbeatable.

    I can't wait to see how MetroPCS' merger with T-Moble will do to Metro's phone selection...
  • -1 Hide
    Kami3k , October 16, 2012 12:16 AM
    otacon724G can't hold a candle to LTE.


    Derp.....
  • 0 Hide
    bgrt , October 16, 2012 2:07 AM
    I think most consumer groups agree that this will give AT&T and VZW some badly needed competition. Still, I prefer TMo for their prices and the fact that their phones are portable to any country in the world.
  • 2 Hide
    tobalaz , October 16, 2012 3:57 AM
    I have Sprint.
    I live in a rural area in Ohio.
    I have great 3g all around me.

    I went to a Browns game (I know, punishment right?) in Cleveland with 2 cousins (one used AT&T, the other Verizon), where Verizon sponsored the event and AT&T sponsored the stadium, and I'm the only one who got 4g or any signal for that matter.

    But...

    I'm thrilled that Sprint is getting bought out, its new money and I hope this contributes to a big boost in the number of 4g towers, but hey, I've currently got an Evo 4g, so its not like my phone runs fast enough to take advantage of a good data connection anyways.
  • 1 Hide
    SirGCal , October 16, 2012 4:42 AM
    sykozisWhile the data isn't limited....the coverage area very much is.... They currently have no 4G network....yet they actively market their "4G" smartphones, placing emphasis on the "4G" capability of said phones. Sprint's 3G network has less coverage than AT&T's 4G network, which is pathetic at this point. Their phone selection sucks compared to their competitors (including pre-paid cellular services)... They try to charge customers to replace phones that are covered by a manufacturer's warranty... There's really very little Sprint actually does right....


    Wow, that's simply untrue. They DO have a 4G network. I have 4G almost everywhere I go accept very rural areas. I was on AT&T and around here, their network sucked. But with everything, it is very dependent on where you are to which carrier is best. I always have full bars and internet where on AT&T, even at home I had 1 or no bars and couldn't even get 3G internet speeds. And I live just outside a major metro city less then half a mile from one of the countries most major highways. I've also traveled all over the south (from California to Florida and up to Ohio) and so far have not had a dead spot. Some places don't have 4G but at least on the highways, it's been good. And I couldn't be happier with Sprint. Until now. If they take away unlimited everything, I'll just drop smart-phones all together. I'm not paying for tiered data through anyone. Simple as that.
  • 0 Hide
    ikyung , October 16, 2012 8:19 AM
    If SoftBank is confident enough to dump 1/3rd of their capitalization into Sprint, then they probably have something big planned for the U.S. market. I wonder how they are going to compete against Verizon and AT&T because it will probably take another 10 billion to catch up on coverage area.

    Softbank is a huge carrier in Japan, but Japan is small and can easily be fully covered with 4G networks, but U.S. is a whole different ballpark.
  • 0 Hide
    ironmb , October 16, 2012 10:04 AM
    First off, SoftBank is one the carriers here in Japan. They have the worst service out of all companies out here. Docomo, and AU far out perform SoftBank.. so the fact that i see Softbank getting into Sprint just makes me laugh. When bad companies take over, they usually turn out bad.
  • -1 Hide
    WyomingKnott , October 16, 2012 1:46 PM
    Let's sell more of our infrastructure to foreign companies! Of course they have the wellbeing of the American consumer as the first thing on their agenda.

  • 0 Hide
    siman0 , October 16, 2012 1:55 PM
    SoftBank does suck in Japan... and a extremely high price for nothing. Sprint is good here in the US but they are falling behind now. Their phones have been falling behind and they messed up on the 4g deployment with WiMAX. Given though WiMAX performs better than LTE, LTE can be easily upgraded in insisting towers compared to WiMAX and LTE has a longer rage due to less bit errors.
  • 0 Hide
    gggplaya , October 17, 2012 5:22 PM
    sykozisWhile the data isn't limited....the coverage area very much is.... They currently have no 4G network....yet they actively market their "4G" smartphones, placing emphasis on the "4G" capability of said phones. Sprint's 3G network has less coverage than AT&T's 4G network, which is pathetic at this point. Their phone selection sucks compared to their competitors (including pre-paid cellular services)... They try to charge customers to replace phones that are covered by a manufacturer's warranty... There's really very little Sprint actually does right....


    Actually you are very very very wrong. Sprint has had actual 4G coverage for a very long time, and is more widespread than Verizon's and ATT. If you look closely at verizon's ads you'll see that it says it has the nations largest "4G LTE" coverage. Take note of the LTE coverage because if you drop those three letters, sprint has the largest TRUE 4G coverage using WiMAX.

    ATT's 4G coverage isn't actually 4G, it's HSPA+ 3G which they simply call 4G as there is no standard. Using that protocol, their phones will say 4G even though they are working at 3G speeds, at least that's the way it is in my area. Speeds of 100-400kbps and the phone says 4G? Att is launching it's 4G LTE coverage same as sprint, except sprint has more leverage in that it can convert it's 4G WiMax systems to run 4GLTE which will make for faster set up time than ATT. Verizon is ahead in LTE coverage, but sprint will catch up very quickly. Wimax coverage is still very good in all major U.S. cities.

    Unfortunately there is no true map of actual 4G coverage because there is no standard. It would be nice to have a map of data coverage of area's >1Mbps vs which standard they use. A name is just a name, calling it 4G because you use a 4G capable protocol doesn't mean you'll have good speed, especially if the back-haul doesn't have a high speed data connection to the cell towers in your area. It's like having Z rated high speed tires in a car with a crappy 3cylinder engine. One is useless and just for show without the other. That's called good advertising.
  • 0 Hide
    LukeCWM , October 18, 2012 6:24 PM
    I have Sprint with 4G on my Galaxy S2. I drive all over the Twin Cities streaming audio, and if there are places without 4G coverage, they are few enough that my audio never hiccups. The songs buffer quickly, and the next song is automatically buffered with no delay.

    I regularly get 10 Mbps down and 2 Mbps up. That is better than most people's home internet (although probably not most Tom's Hardware regulars). People who are saying Sprint doesn't have sufficient coverage or sufficient speed are misinformed. Of course, coverage will very from city to city, but I have no reason to believe that Minneapolis/St. Paul has better coverage than other metropolitan areas.