Sprint Nextel to buy rest of rival Clearwire for $2.1 bn
14 December 2012
Sprint Nextel Corp, the third-largest telecommunications company in the US, today offered to buy the remaining stake it does not already own in struggling wireless internet provider Clearwire Corporation, for $2.1 billion, in a bid to widen its 4G network.
The offer comes just two months after it agreed to sell a controlling 70-per cent stake in itself to Japan's third-largest mobile carrier Softbank for $20.1 billion. (See: Japan's Softbank to buy 70 % stake in Sprint Nextel for $20.1 bn)
Just after agreeing to sell a majority stake in the company to Softbank, Sprint Nextel upped its stake in Clearwire from 48 per cent to a controlling 50.8-per cent by acquiring additional 30.9 million shares for approximately $100 million. (See: Sprint Nextel buys controlling stake in Clearwire Corp)
The proposed deal would give Overland Park, Kansas-based Sprint Nextel control of Clearwire's vast spectrum to better compete with its two top rivals Verizon Wireless and AT&T.
Sprint Nextel would gain control of Clearwire's 2.5 GHz spectrum which facilitates high-speed broadband services, and it's 4G WiMax network. Although Sprint is using Clearwire's network to provide Sprint 4G, it is also building its own 4G network.
Clearwire stock price had earlier this week surged after CNBC and The Wall Street Journal reported that a deal was expected.