Telecom Lead America: Sprint will buy around 50 percent stake in Clearwire for $2.2 billion.
The enterprise value of Clearwire will be approximately $10 billion, including net debt and spectrum lease obligations of $5.5 billion.
Sprint already owns 51.7 percent stake in Clearwire.
Buying the rest stake in Clearwire will assist Sprint to ensure an enhanced spectrum portfolio to increase competitiveness in the U.S. wireless market.
Sprint will try to expand LTE network aggressively.
Clearwire owns spectrum that is similar to what SoftBank uses in Japan, potentially giving the newly strengthened Sprint more clout in ordering the latest devices.
Comcast, Intel and Bright House Networks, who collectively own approximately 13 percent stake in Clearwire, will exit from the company.
Sprint Nextel is #3 wireless operator in the U.S., trailing Verizon Wireless and AT&T.
“Sprint is uniquely positioned to maximize the value of Clearwire’s spectrum and efficiently deploy it to increase Sprint’s network capacity. We believe this transaction, particularly when leveraged with our SoftBank relationship, is further validation of our strategy and allows Sprint to control its network destiny,” said Sprint CEO Dan Hesse.
SoftBank of Japan, the new owner of Sprint with 70 percent equity stake, has provided its consent to the transaction.
Clearwire, which also counts Sprint as its biggest customer, has been seeking financing for a high-speed wireless network upgrade and to keep itself afloat, Reuters reported.
“Our board of directors has been reviewing available strategic alternatives over the course of the last two years. In evaluating available alternatives, a special committee conducted a careful and rigorous process, and based on the committee’s recommendation, our board unanimously determined that this transaction, which delivers certain and attractive value for our shareholders, is the best path forward,” said Clearwire CEO and President Erik Prusch.