FCC clears way for SoftBank to buy Sprint, Sprint to buy ClearwireThe U.S. Federal Communications Commission on Friday announced the removal of the last barrier to a three-company merger that will see Japan's SoftBank take control of Sprint Wireless, which itself is set to take over Clearwire.
Sprint confirmed the regulatory body's decision midday on Friday, noting that its shareholders have already approved SoftBank's $21.6 billion bid to buy the United States' third-largest wireless carrier. Sprint's move to purchase the rest of Clearwire will go before shareholders on July 8.
Clearwire's Board of Directors have already recommended that Sprint's offer to buy a controlling stake in Clearwire be approved by shareholders. Sprint's offer which will see it purchasing the remaining 50 percent of Clearwire for $5 per share values Clearwire at $14 billion.
Sprint anticipates both transactions will close early in July, subject to the remaining closing conditions. The transaction will bring to an end a months-long process that has seen offers, counter-offers, and considerable competition.
Japanese cellular carrier and Internet solutions giant SoftBank initially offered to purchase a 70 percent stake in Sprint for $20 billion in October of last year. The move was largely thought of as a means for SoftBank to continue growing as its home wireless market reached saturation.
In April, SoftBank saw competition in the form of Dish Network, which launched a surprise bid to acquire Sprint itself for $25.5 billion. Dish's offer would have required it to take on considerable debt in order to accomplish, though, and the company dropped out of the running late last month.
SoftBank eventually raised its offer to $21.6 billion, with the cash component of the deal for shareholders rising to $4.5 billion. The final offer leaves the Japanese carrier in control of 78 percent of Sprint.
SoftBank hopes to use both Sprint's and Clearwire's 4G spectrum holdings to improve service for existing customers and attract new ones along the way. In courting Sprint's shareholders, SoftBank CEO Masayoshi Son continually touted his company's expertise in 4G technologies, specifically its use of a single-frequency network technology. That tech could allow Sprint to reduce interference in its own network and provide its customers with improved reception.
In the first quarter of this year, Sprint sold 1.5 million iPhones, but lost 560,000 customers to competitors. At the end of the quarter, the carrier had 31.3 million customers on contract paying an average of $61.47 per month.