Japanese Carrier Softbank Will Buy $20 Billion Majority Share in Sprint

Japanese Carrier Softbank Will Buy $20 Billion Majority Share in Sprint

Japanese carrier Softbank is purchasing 70% of Sprint for $20 billion. In a deal announced today, Softbank will buy $8 billion in shares directly from Sprint, with another $12 billion purchased from stockholders at $7.30 a share.

MacRumors:

The purchase is a huge one for Softbank, which is essentially making a $20 billion gamble that its success in developing LTE wireless services in its home market of Japan can be translated to the U.S. Sprint, while the third largest wireless provider in the U.S., significantly trails the two market leaders, Verizon and AT&T.

Softbank hopes to build on Sprint’s spectrum position, while also hoping the company can further consolidate the industry through acquisitions of other operators and more spectrum.

The announcement was made by Softbank’s billionaire founder and chief Masayoshi Son and Sprint Chief Executive Dan Hesse at a packed news conference in Tokyo on Monday. The deal will give Softbank a foothold in a U.S. market that is still growing, while Japan’s market is stagnating.

MSN reports that part of the deal will involve a direct infusion of billions of dollars into Sprint, hopefully giving it the firepower to buy peers and build out its 4G network to compete in a market dominated by AT&T Inc and Verizon Wireless. (As a iPhone 5 user on Sprint, I hope this takes place quickly, using 3G on a 4G capable device, is NOT where it’s at!)

Sprint became the third major U.S. carrier to offer the iPhone in October 2011. At that time Sprint committed to purchase more than 30 million iPhones worth $20 billion over the first four years of the partnership.