In Latest Wireless Sector M&A Deal, Sprint Acquires U.S. Cellular Assets for $480M
The deal comes after Softbank announced a plan to acquire 70 percent of Sprint
Sprint Nextel Corp. (NYSE: S) will acquire PCS spectrum and customers in U.S. Cellular (NYSE: USM) for $480 million in cash.
Overland Park, Kan.-based Sprint will get about 585,000 customers in parts of Illinois, Indiana, Michigan, Missouri and Ohio through the deal.
Sprint will buy 20 MHz of PCS spectrum in the 1900 MHz band in various Midwest markets including Chicago, South Bend, Ind. and Champaign, Ill. and 10 MHz of PCS spectrum in the St. Louis market.
“This transaction will enable us to strengthen our business and become a more robust competitor,” said Dan Hesse, Sprint’s CEO.
The deal is subject to regulatory approval from the U.S. Department of Justice and the Federal Communications Commission. It is expected to close in mid 2013.
The deal comes as part of a long line of wireless carrier M&A activity. Softbank Corp. (TSE: 9984) announced it wanted to acquire 70 percent of Sprint for $20.1 billion in October.
That transaction would give Sprint more cash as it competes with Verizon Wireless, AT&T and T-Mobile, which announced a plan to merge with Metro PCS Communications Inc. (NYSE: PCS) in October.
Last year, AT&T proposed to buy T-Mobile for $39 billion, but the deal was stopped by regulators who argued it would reduce competition, limit consumers’ choices in wireless providers and raise prices for mobile services.