Sprint Stockholders to Receive Total Consideration of $12.1 Billion in Cash and 30% Ownership in Newly Capitalized Sprint
Significant Investment in the United States by One of the World's Most Successful and Innovative Companies
SoftBank's cash contribution, deep expertise in the deployment of next-generation wireless networks and track record of success in taking share in mature markets from larger telecommunications competitors are expected to create a stronger, more competitive New Sprint that will deliver significant benefits to U.S. consumers. The transaction has been approved by the Boards of Directors of both SoftBank and Sprint. Completion of the transaction is subject to Sprint stockholder approval, customary regulatory approvals and the satisfaction or waiver of other closing conditions. The companies expect the closing of the merger transaction to occur in mid-2013.
SoftBank Chairman and CEO, Masayoshi Son, said, "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 one of the world's largest markets. 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 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 wireless market."
The SoftBank transaction is expected to deliver the following benefits to Sprint and its stockholders:
- Provides stockholders the ability to realize an attractive cash premium or to hold shares in a stronger, better capitalized Sprint
- Provides Sprint with $8.0 billion of primary capital to enhance its mobile network and strengthen its balance sheet
- Enables Sprint to benefit from SoftBank's global leadership in LTE network development and deployment
- Improves operating scale
- Creates opportunities for collaborative innovation in consumer services and applications
Sprint CEO, Dan Hesse, said, "This is a transformative transaction for Sprint that creates immediate value for our stockholders, while providing an opportunity to participate in the future growth of a stronger, better capitalized Sprint going forward. Our management team is excited to work with SoftBank to learn from their 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."
Transaction Terms
SoftBank is financing the transaction through a combination of cash on hand and a syndicated financing facility.
The transaction does not require Sprint to take any actions involving Clearwire Corporation other than those set forth in agreements Sprint has previously entered into with Clearwire and certain of its shareholders.
After closing, Sprint's headquarters will continue to be in Overland Park, Kansas. New Sprint will have a 10-member board of directors, including at least three members of Sprint's board of directors. Mr. Hesse will continue as CEO of New Sprint and as a board member.
The Raine Group LLC and Mizuho Securities Co., Ltd. acted as lead financial advisors to SoftBank. Mizuho Corporate Bank, Ltd., Sumitomo Mitsui Banking Corporation, The Bank of Tokyo-Mitsubishi UFJ, Ltd. and Deutsche Bank AG, Tokyo Branch acted as mandated lead arrangers to SoftBank. Deutsche Bank also provided financial advice to SoftBank in connection with this transaction. SoftBank's legal advisors included Morrison & Foerster LLP as lead counsel, Mori Hamada & Matsumoto as Japanese counsel, Dow Lohnes PLLC as regulatory counsel, Potter Anderson Corroon LLP as Delaware counsel, and Foulston & Siefkin LLP as Kansas counsel.
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