AT&T announced plans Friday to buy mobile carrier Leap Wireless in a deal worth at least $4 billion, giving the telecom giant needed spectrum along with the Cricket prepaid phone franchise.
AT&T said it was paying $15 a share, around $1.2 billion, and would assume the smaller carrier's $2.8 billion in debt. It will acquire the five million customers now using Leap.
Leap shareholders would also receive proceeds from the sale of a portion of spectrum which would be sold after the deal.
Under the agreement, AT&T will acquire all of Leap's stock and wireless properties, including licenses, network assets, retail stores and subscribers.
AT&T said it will retain the Cricket brand name, and expand Cricket's presence to additional US cities.
"The result will be increased competition, better device choices, improved customer care and a significantly enhanced mobile Internet experience for consumers seeking low-cost prepaid wireless plans," a company statement said.
"The combined company will have the financial resources, scale and spectrum to better compete with other major national providers for customers interested in low-cost prepaid service. Cricket's employees, operations and distribution will jump start AT&T's expansion into the highly competitive prepaid segment."
The acquisition includes spectrum covering 137 million people and is largely complementary to AT&T's existing holdings.
The statement said owners of 29.8 percent of Leap's outstanding shares have approved the plan, which is subject regulatory approval. In 2011, AT&T tried to buy T-Mobile but dropped the plan after regulatory opposition.
[Image via Agence France-Presse]