AT&T Inc announced that it will acquire prepaid wireless provider Leap Wireless International Inc in a deal valued for about US$4 billion. Under the agreement of the deal, AT&T will acquire all of Leap's stock and its estimated 5 million subscribers for US$15 per share in cash or about US$1.2 billion. As part of the deal, AT&T will assume Leap's US$2.8 billion worth of debt.
The AT&T deal with Leap is the latest in a series of acquisitions in the wireless industry following the Softbank acquisition of Sprint. AT&T stands as the No. 2 wireless provider in the United States and the company has been looking for growth in a mature market.With the increase in demand for bandwidth-hungry smartphones and tablets in the U.S. has wireless carriers clambering to gain access to more airwaves.
Todd Rethemeier, analyst for the Hudson Square Research said."It's mostly about the spectrum for AT&T. It's Leap's only alternative. Continuing as an independent company is not a viable option for Leap at this point."
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