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Japan’s Softbank to acquire Sprint for $20.1bn

Japanese mobile operator Softbank is set to acquire 70% of US operator Sprint Nextel for $20.1bn, in a bid to gain entry into the US market.

The deal will include $12.1bn to be paid to Sprint shareholders, as well as $8bn in new capital for the number three carrier in the US.

By not doing a full takeover, Sprint will remain a US public company. Sprint’s current chief executive Dan Hesse will remain as chief executive of ‘New Sprint’ – the name given to the new venture – and its headquarters will continue to be in Kansas.

The deal marks the biggest overseas acquisition by a Japanese firm and is expected to close in mid-2013. Through the acquisition, Softbank will become one of the world’s three biggest mobile phone operators with 96 million users.

“Softbank is becoming a top player in the market. We will be the global number three in mobile revenue [after China Mobile and Verizon Wireless],” says Softbank chairman and chief executive Masayoshi Son, in a press conference.

Son described the deal as a “compelling market opportunity” for both players.

“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,” he adds.

Jenni Baker, London